Mortgage mistakes that can cost you bigA home mortgage is one of the largest financial commitments that you will make in your lifetime. Most people do not take the time to learn about mortgages. A little time could save you thousands of dollars.
Common Mistakes to Avoid When Obtaining a Home Mortgage
The best way to research is to either read a book or get information from reputable websites. It may take a little time, but the money you save will be well worth it.
This guide is about some of the common mistakes people make when obtaining a mortgage. It is not meant to be all-inclusive, but it is a good start on your quest to obtaining a good mortgage loan.
Here are the common mistakes:
Going with just any lender. Why would you put your money into the hands of someone you don't trust? A lender that is less-than-reputable can milk you out of thousands of dollars without you even knowing it. Do a little research on your prospective lender. At the very least, check with the Better Business Bureau.
Looking only for the lowest rates. We all want the lowest rates, but don't fall for every advertisement you see for low rates. Just like a car ad can advertise a low price on a car only to find out later that the price went up, the same thing can go for an advertised loan rate. Ask how long they guarantee their low rate. Remember rates change every day. Even if the lender locks in the rate, it is only for a limited period of time. If closing on your home takes longer than normal, the lender cannot guarantee you the rate will remain locked.
Going for those special mortgage programs. Some special programs look tempting, but they may not be right for your given situation. If the lender says that a particular program is good for your situation, ask him to explain why it is beneficial. If you don't get a satisfactory answer, then it may not be such a great program after all.
Trying to bottom out the market. Everyone is looking to get the lowest rate possible. But if it looks like rates are generally going up, then it might be best to lock in your rate when submitting your loan application.
Not being prepared for closing costs. When you apply for your mortgage, the lender will give you a good faith estimate. This will include an estimate of all your closing costs. The good faith estimate will not be too different from your final costs, but they are not set in stone. One thing you should do is try to negotiate some closing costs that you feel are not necessary. Scrutinize closing costs carefully.