Home Mortgage Loan Mistakes Most Homebuyers Make

Home Mortgage Loan Mistakes Most Homebuyers Make

Home Mortgage Loan Mistakes Most Homebuyers Make
MISTAKE #1 Over shopping your loan

Your credit score is​ based on​ the​ perceived risk associated with extending you​ credit . ​
Over the​ years,​ the​ credit reporting agencies have determined that a​ borrower who seeks credit from many different lenders is​ riskier than others . ​
Therefore,​ they decrease your credit score each time a​ lender pulls your credit report . ​

Each time you​ call a​ lender seeking the​ best possible rate and​ terms for​ your home mortgage,​ he has to​ pull your credit report . ​
This is​ factored into your credit score,​ and​ a​ lower score decreases your likelihood of​ getting the​ best rate and​ terms . ​

While some consumers are ONLY focused on​ rates,​ you​ should seek the​ guidance of​ a​ National Association of​ Responsible Loan Officers member that is​ willing to​ speak with you​ about your loan options . ​
There are literally hundreds of​ loan products available and​ every borrower has a​ different financial situation and​ financial goal . ​
We highly recommend having a​ consultation with your loan officer so they can tailor a​ program to​ meet your individual needs instead of​ focusing exclusively on​ rates and​ points . ​
you​ may likely find a​ better product than the​ one you​ were shopping for . ​

MISTAKE #2 Trying to​ hide past financial difficulties

One of​ the​ important services a​ responsible loan officer offers is​ helping you​ overcome past financial difficulties that may hinder your ability to​ have your loan approved . ​
Your loan officer is​ on​ your side . ​

Supply the​ information that will help your loan officer provide you​ with the​ best possible rate and​ terms and​ minimize the​ impact of​ your past credit history . ​
the​ fact that you​ have recovered from past financial problems makes you​ a​ better risk than others who haven’t yet faced challenges . ​
Overcoming past financial difficulty proves that you​ honor your commitments and​ don’t give up . ​

MISTAKE #3 Allowing a​ loan officer to​ put misleading or​ untruthful information about your income,​ expense or​ cash available for​ down payments on​ a​ loan application in​ order to​ get a​ loan

Providing untruthful information on​ a​ loan application is​ fraud . ​
Mortgage fraud is​ prosecuted by federal authorities,​ and​ they will find out about the​ fraudulent information . ​
Do not allow yourself to​ become an​ accomplice of​ a​ loan officer’s fraudulent loan application . ​

Even if​ a​ loan officer fills in​ the​ information for​ you,​ if​ you​ do not believe the​ loan application is​ 100% truthful,​ you​ should refuse to​ sign it​ until the​ loan officer corrects the​ application . ​
While many loan officers try to​ help borrowers by misstating the​ facts,​ the​ truth is​ that they are simply getting themselves and​ their borrowers into a​ lot of​ trouble . ​

MISTAKE #4 Borrowing more than you​ can repay

All of​ us understand that we may have to​ stretch our monthly budgets a​ bit to​ afford the​ homes we want . ​
However,​ you​ will put your entire financial health in​ jeopardy by buying a​ home you​ simply cannot afford . ​

If you​ buy an​ expensive home and​ find you​ cannot make the​ monthly payments,​ you​ could face a​ huge loss when you​ have to​ sell that home quickly to​ get out from under your mortgage . ​
or​ worse,​ you​ could be forced into foreclosure or​ bankruptcy . ​

It is​ much better to​ be patient,​ buy a​ home you​ can comfortably afford,​ make payments,​ build equity and​ then transition into a​ larger home after a​ couple of​ years . ​
Yes,​ the​ larger home will cost more then,​ but the​ home you​ purchased will also have appreciated during that time . ​
Most importantly,​ you​ will have built a​ successful financial foundation that allows you​ to​ experience all of​ your dreams,​ including that dream home . ​

MISTAKE #5 Relying on​ interest rate advertising

Some loan officers use interest rates to​ get your attention; however,​ they may actually end up costing you​ more . ​
Such rates are often derived by using a​ 30year mortgage coupled with an​ accelerated payment plan . ​

You may decide you​ like that option,​ but you​ cannot directly compare the​ interest rate on​ that mortgage to​ other opportunities . ​
This loan could cost more than other mortgages with seemingly higher interest rates . ​

It is​ critical to​ find a​ loan officer you​ can trust to​ review the​ options available to​ you​ and​ the​ best possible rates for​ your financial situation . ​
Only a​ responsible loan officer can give you​ all of​ your options in​ an​ understandable way . ​

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