Ten Mistakes And How They Can Affect Your Mortgage

Ten Mistakes And How They Can Affect Your Mortgage



Ten Mistakes And How They Can Affect Your Mortgage
Wouldn't it​ be great if​ everything in​ life came with a​ checklist? Unfortunately,​ for most of​ us we have to​ learn life's lessons the​ hard way - by experiencing them! Fortunately,​ for home buyers there are some rules of​ the​ game that are well known and can help you​ avoid major pitfalls when buying a​ home or​ refinancing your mortgage .​
Let's take a​ look at​ ten mistakes that can have detrimental affect on​ your mortgage so you​ can prepare yourself now to​ get the​ best terms possible on​ your next mortgage.
#1 - Not shopping around .​
Too many people go to​ their local bank or​ other financial institution for their mortgage and never shop around .​
as​ a​ result,​ they end up paying more over the​ life of​ the​ loan because they don't realize what they could have had .​
Go to​ at​ least three mortgage providers when looking for a​ loan - make them compete and earn your business!
#2 - Using the​ mortgage broker the​ realtor recommends .​
Sure the​ realtor is​ the​ sweetest person you​ ever met and tells you​ not to​ worry because her friend over at​ ABC Mortgage will take care of​ you​ - what she isn't telling you​ is​ that she is​ getting a​ kickback for recommending them .​
Realtors have one goal in​ mind - to​ earn commission on​ the​ sale .​
you​ can often get much better deals by shopping around yourself and saying no thanks to​ the​ recommendation.
#3 - Buying too much house .​
How many square feet do you​ need and how much can you​ afford? Don't get yourself into a​ situation where you​ have too much house that you​ can't afford over your lifetime .​
Remember,​ it's not just the​ monthly payments you​ have to​ worry about .​
you​ also need to​ think about property taxes,​ insurance and heating and cooling costs.
#4 - Getting into the​ wrong mortgage .​
a​ quick scan of​ the​ newspapers will show you​ that a​ lot of​ people have gotten into the​ wrong mortgage .​
Make sure you​ know the​ differences between fixed and adjustable rate mortgages and seek the​ help of​ a​ trusted,​ third party to​ help you​ make the​ right decision .​
Be sure to​ review the​ prepayment penalties as​ well - why should you​ be penalized for paying off your loan ahead of​ time?
#5 - Credit .​
This one you​ probably already know about,​ but it​ is​ worth repeating again and again .​
Clean up your credit and don't make any big purchases right before you​ go to​ take out a​ mortgage .​
Save the​ new car purchase or​ flat-screen TV purchase until after you​ have signed the​ loan paperwork!
#6 - Borrowing too much .​
This goes hand in​ hand with #3 .​
Don't anticipate future earnings and buy a​ house you​ simply cannot afford .​
Purchase a​ house you​ can afford now,​ even if​ it​ may not be your dream house .​
in​ a​ few years,​ if​ you​ are earning more,​ you​ can look into buying a​ bigger house .​
Start small and work your way up so that you​ know you​ can afford your mortgage and not get yourself into financial trouble down the​ road.
#7 - Missing out on​ programs for first time home owners .​
Many first time homeowners don't take advantage of​ the​ various programs and discounts available for them .​
Check into local,​ state and federal programs that can help reduce your interest rate and potentially negotiate better terms.
#8 - Inaccurate information,​ or​ garbage in/garbage out! Don't try and fool the​ lender - it​ isn't worth it .​
Make sure you​ have supporting documentation for everything you​ put down on​ the​ mortgage application .​
Furthermore,​ never sign a​ mortgage document in​ which the​ lender hasn't completely filled out all the​ fields .​
Insist on​ honesty on​ both sides of​ the​ desk!
#9 - Not locking in​ the​ rate .​
Rates can change in​ the​ blink of​ an​ eye .​
Get your rate locked in​ and don't wait around until the​ last moment .​
Get your rate in​ writing with the​ complete terms spelled out from your mortgage lender when you​ lock it​ in.
# 10 - Not considering the​ other charges in​ your mortgage .​
Sure,​ you​ got a​ great rate on​ your mortgage,​ but did you​ carefully read about the​ other charges the​ lender has stuck in? Rates are important,​ but make sure you​ understand the​ full cost of​ your loan .​
Read (and question) all the​ charges listed .​
Sure,​ you​ might have to​ pay a​ quarter of​ a​ percent more by going somewhere else,​ but after you​ add up all the​ fees you​ may find that by going to​ a​ lender with a​ slightly higher rate can actually save you​ money.




You Might Also Like:




No comments:

Powered by Blogger.