10 Biggest Mortgage Mistakes First-Time Home Buyers Make

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  • Buying a home is the biggest purchase most people will ever make;

    yet many go into it blindly!?

    HERE ARE THE 10 BIGGEST MORTGAGE MISTAKES FIRST-TIME HOMEBUYERS

    MAKE & HOW TO AVOID THEM!

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    A credit score is calculated by looking at a number of financial statistics, such as ones payment history, new/old credit, amount outstanding, types of credit, length of credit availability, to name but a few.

    The better the score, the lower the interest rate at which you will borrow; and subsequently, the lower the credit score, the higher the interest rate!

    Based on a study by U.S. PIRG, a shocking 80% of credit reports (thats 4 out of 5!) contains errors!

    Set aside about 6-12 months before you start applying for mortgages!

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    While there are quite a few reasons why a bigger deposit is beneficial to the home buyer, heres a short list of the 5 most important ones:

    Ease of approval More favorable interest rate Lower monthly mortgage payments Reduce mortgage insurance Avoiding negative equity

    Doesnt it just make financial sense to avoid using a low or zero down payment?!

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    A lot of home buyers dont necessarily think everything through when applying for a mortgage loan. Financial institutions, on the other hand, will closely look at an applicants current outstanding debt, and bring it in relation to their income.

    If theres one lesson to be learnt when applying for a mortgage bond, try to pay off as much of your credit card debts and other types of debt before you start with the mortgage application!

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    Its rather advisable to avoid interrupting ones employment during the mortgage loan application.

    Even if you feel horrible at your current job and youre ready to tell your boss his fortune: do not change jobs until youve closed on the home loan!

    It really comes down to one word: stability.

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    How much house can they afford with their income? How much are the monthly taxes and insurance? How about basic maintenance? Or unexpected maintenance?

    Home buyers should get a pre-approval prior to the start of their home search, so theyll know how much house they can afford. Ideally, they should not try to maximize that amount, as one needs to realistically calculate in some extra monthly expenses.

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    As tempting as it might be to start shopping for new interior decorations and furniture for the new house, any large purchases will be flagged and hit your credit score. Paying with card would adjust your outstanding debt; paying cash could potentially signal a flag when your cash reserves are being monitored during this critical time! One of the biggest mortgage mistakes home buyers make is purchasing a new car or living room leather furniture set!

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    The day you get your loan (which tends to be the same day you take ownership of your new property) is pretty much the loan closing. At that point, youll need to have the necessary funds to pay for closing costs, such as lender fees, attorneys fees, title insurance, pre-paid homeowners insurance, taxes etc. All-in-all, youll probably be looking at 2-7% of the purchase price (upper range of that percentage tends to be when buying a lower-priced property, and lower range percentage if youre getting a bigger property).

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    When you booked your last airline tickets, did you go to one particular airline companys website and buy a round-trip ticket Los Angeles New York at their suggested price? No? Why?

    Yet, 77% of borrowers only applied to ONE lender?!

    Its no surprise to hear that the majority of these consumers may not have received the best mortgage solution for their specific circumstance!

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    Looking at houses for sale without knowing how much you can afford is setting yourself for failure and disappointment!

    One of the worst feelings for a seller (and the real estate agent, for that matter) is when the offer on the house falls through due to problems securing the necessary loan.

    Pre-approvals arent optional if you are serious about buying a home!

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    Forgetting to disclose? Its pretty clear that if a financial institution were to find out after submitting the application that you have (purposely) omitted to come forward with certain information, or plainly lied about certain points, that theres now a big shadow of untruthfulness over everything else you have supposedly fully-disclosed.

    More often than not, your mortgage application will be declined, and may potentially jeopardize future applications as well.

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  • Theres no doubt about it that the mortgage application process can be a stressful one!

    Unfortunately, most people are rather shocked when theyre first explained how their credit

    report reads! Not everybodys financial health is as good as they believe it to be!

    In the end, if your mortgage application gets declined, theres a great chance one or

    more of the above mortgage mistakes were likely the cause!

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    GET MORE DETAIL BY READING THE FULL BLOG ARTICLE HERE.

    http://www.northcliffrealestate.com/http://northcliffrealestate.com/real-estate-blog/10-biggest-mortgage-mistakes-first-time-home-buyers-make/