What are some of the most common mortgage mistakes?
1. Not Knowing How Much Money You Can Put Down.
It’s important to know how much you can afford to pay in down payment and closing costs when you apply for your mortgage. The more you put down, the better rates and terms you’re likely to get. At the same time, you also need to stay within your means and comfort level.
2. Working With A Mortgage Banker Who Has A Poor Performance Record.
Industry insiders know that the most common reason that a sale fails to go through is that the mortgage fails to go through. Ask your mortgage Banker about his/her performance guarantee.
3. Not Understanding The Process.
Most of us don’t shop for a mortgage very often. As a result, it isn’t something we become familiar with. Work with a mortgage Banker who will take the time to answer your questions and uses terms you understand.
4. Working With A Lender Who Has Only One Investor.
Not all lenders have a range of options when it comes to investors. What if that investor doesn’t offer the type of mortgage you need? Or worse yet, what if you need to change loan products after you’ve started the process? Working with a mortgage Banker who has many investors enables you to address these issues without starting the process over again.
5. Making Large Purchases Prior To Your Mortgage Application.
Many people think that it is in their best interest to get large purchases completed prior to applying for their mortgage. As total debt is a key component in determining the amount of home you qualify for it is best to wait until after your home purchase has closed to make such purchases.
6. Over Shopping Your Loan.
Each time you call a lender seeking the best possible rate and terms you have your credit report pulled. Every time your credit report is pulled, you risk decreasing your credit score and thus possibly decreasing the likelihood of getting the best rate and terms. Experts recommend that you select a mortgage Banker with a number of investors and you do your shopping with him/her.
7. Hiding Things From Your Mortgage Banker.
Most of us have experienced times of financial difficulty at some point. While it can be embarrassing to discuss issues like this, your Mortgage Banker is there to help you get loan approved despite such issues. Your mortgage Banker can only help you with those things with which he/she is aware.
8. Making Late Payments.
Late payments, especially those within the last year, can be very detrimental to getting the best rate, terms, and even the difference of being approved at all. While this might seem like unnecessary advice, always pay on time.
9. Over Using Credit Cards.
Credit cards are a convenient way to make purchases, but if not paid off or balances kept low, you might find it more difficult to get the best rates and terms on your mortgage. Keeping your total debt as low as possible helps you get the mortgage that best meets your specific needs.
10. Cosigning On Someone Else’s Loan.
While it can be a great service to a friend or loved one, signing to guarantee someone else’s loan can often a big headache for the cosigner. Before cosigning you decide if you’re willing and/or able to assume the liability.
11. Not Getting All The Facts.
It is important to learn the total cost of your mortgage loan, both at closing and for the life of the loan. While mortgages can look a lot alike, there can be subtle differences which can save or cost you money.