Mistakes to Avoid
There are many mistakes to avoid when getting a mortgage. We've listed what we feel are some very important ones to watch out for:
- Looking for a house without knowing your price range. Everyone has a limit to what they can afford.
- Taking the biggest loan possible, while assuming that personal or family incomes will grow in the future.
- Include a second name on the mortgage with some one who is not your spouse or partner without a written agreement.
- Allowing the purchaser of your existing home to assume the current mortgage without a liability release.
- Assuming you have to complete the sale of your current house before you buy a new one.
- Making a decision about a mortgage provider based upon telephone information or newspaper ads.
- Lack of criticism when accepting loan solicitations or referrals. In other words, not asking enough questions.
- Assuming you can converse with one lender one day, and then another the next day.
- Assuming cleaning up credit card debt will immediately improve credit score.
- Believing that comparing multiple loan sources could affect credit rating.
- Assume all rates quotes given are accurate or truthful. Whether through bad faith or simple mistakes, these quotes can change dramatically.
- Select a lender without knowing the charges for service, then trying to negotiate later.
- Not understanding the difference between a no-cost mortgage with a no-cash mortgage.
- Assuming that a loan without closing costs may be a good deal.
- Choosing a lock or closing date that might be too soon for the lender to finish processing.
- Confirm or even favor a rate without comparing with other lenders.
- Taking for granted that an adjustable rate is required to qualify, as lenders often claim.
- Not understanding the difference between “qualified” and “approved.”
- Not considering or consulting special programs intended for first time home buyers. Many local city or state services offer better rates and terms than private lenders.
- And above all, not seeking at least some form of consultation, even if just for information rather than full services.
