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10 Deadly Mortgage Mistakes
Avoid disappointment and SAVE thousands by reading this article.
Everyday there are people just like you that have their mortgage loan turned down because of any one of these mistakes. By acquainting yourself with 10 Deadly Mortgage Mistakes you can save thousands on your mortgage.
1. Using An Interest Only Or Payment Option Adjustable Rate Loan: If you are using these types of loans to qualify for a more expensive home. A home that you could not normally afford, you may be going down the wrong path. There are some circumstances where these loans are useful, but care should be taken in this housing market with slower appreciation and falling prices in some markets. You could end up with a mortgage value higher than the value of the home.
2. Co-signing On Someone Else’s Loan: You could become a great friend or even a hero to someone by doing this. Before you do, ask yourself. Are you willing to assume that liability? Are you willing to forego getting your own home to co-sign? Those could be the ramifications.
3. Making Late Payments: Late payments (especially within the last year) make if very difficult to qualify you for the best terms and rates. It may even keep you from qualifying at all. It might seem unnecessary to say, but always pay on time.
4. Hiding Things From Your Mortgage Broker: Even though it could be embarrassing to discuss previous financial difficulties. Remember that your mortgage broker is there to help. Your mortgage broker can only help you with those things of which he is aware.
5. Over Using Credit Cards: Yes they are convenient, but if the balances are not kept low or paid off it may make getting the best rates and terms on your loan more difficult. Do not take on new debt without first discussing it with your mortgage broker.
6. Making Large Purchases Prior to Your Mortgage Application: On occasion people think that it is in their best interest to get major purchases out of the way prior to making a mortgage application. A key component to determining how much of a home you qualify for is outstanding debt. It is far better to wait until after purchasing your home before considering other major purchases.
7. Choosing a Lender Just Because They Offer The Lowest Rate: Your mortgage rate is an important factor with your loan. Remember that it is only one of several factors. You also need to keep in mind the APR and origination fees. Perhaps the most important factor is accessibility. Is the lender located locally? Can you go sit down and go over the details of your financing. If not, you should think long and hard about using that lender.
8. Not Getting Pre-Approved for a Loan: When you become pre-approved you become a cash buyer and have more negotiating power with the seller. Home buyers can save thousands or dollars in negotiating the home purchase by being pre-approved. Any good Realtor will require the pre-approval prior to showing any homes, because they don’t want to waste your time or theirs.
9. Not Planning for Closing Costs: On the day of your closing you will be expected to write a check to cover closing costs. Closing costs are a number of the expenses incurred when purchasing a home. Those typically include attorneys’ fees, taxes, title insurance, prepaid homeowners insurance, points and other lenders’ fees. These closing costs can amount to between 2% and 7% of the selling price of the home. Your lender should provide you with a good faith estimate early in the loan process to estimate these costs.
10. Not Providing Documents To Your Mortgage Company Timely: When your mortgage broker asks you for additional paperwork, get on it! Do not complain. They are trying to get you approved. If mortgage brokers don’t get the documentation timely, it can result in locks expiring and higher rates. Worst of all, it could mean a delayed or blown closing date.
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