Has the time come to search for a mortgage? Are you anxious to get the right loan in place, but concerned that you could make a mistake that costs you money in the long run?
Many people find themselves in this position. While it’s stressful to search for and secure a mortgage, it’s something you can do with ease if you have the right strategy in place.
One of the most important things you can do is avoid the mortgage mistakes that have plagued so many homebuyers before you. Here are five that you should avoid like the plague:
- Choosing the first lender you find: Yes, this is a good way to save time and take stress off your plate, but it’s also one of the best ways to risk a colossal mistake. You’ll never know what’s available until you compare a minimum of three to five lenders.
- Searching on your own: Yes, it makes sense to search on your own, to a certain degree. But with the help of a broker, you can save time while ensuring that you get in touch with as many lenders as possible. When you combine both approaches, it’s much easier to feel confident in the decision that you make.
- Lack of knowledge regarding mortgage types: For example, you may think that a 30 year fixed rate mortgage is best for you and your finances, but you’ll never know for sure until you learn more about the finer details associated with other options. Maybe a 15 year fixed rate mortgage is best. Perhaps you should consider a variable rate mortgage. It doesn’t hurt to shop around with an open mind.
- Lying on your mortgage application: You may feel that you have to do this in order to gain approval for a loan that will allow you to buy your dream home. However, it’s one of the biggest mistakes you can make. It’s critical that you only provide 100 percent accurate information on your application. Doing anything but this puts you at risk for serious ramifications down the line.
- Neglecting to think long and hard about your down payment: As a general rule of thumb, 20 percent down is a good place to start. Not only does this give you immediate equity in your home, but it allows you to avoid the cost of private mortgage insurance.
There are many mistakes lurking as you search for a mortgage. When you know what they are and how to combat them, it’s much easier to get on the right track and remain there from beginning to end.
When was the last time you applied for a mortgage? Were you able to avoid these five common mistakes?