1. Not
knowing how much money you can really put down
The first step in finding a house is figuring out how much you can afford
to spend. It's very important to know how much you can afford to pay in down
payment and closing costs before you apply for your mortgage. The more you're
able to put down the better rates and terms you're likely to get. At the same
time you also need to stay within your normal standard of living.
2. Not knowing or understanding the mortgage process
How many mortgages did you take last week? If you are like most people, probably
none. In fact, most people don't shop for a mortgage more than a few times in a
lifetime. Therefore, it is not a process we are very familiar with. It's very
important to work with a mortgage broker who will listen and answer all your
questions.
3. Working with a lender who has too few investors
When it comes to investors, not all lenders have a full range of
options. What if he only has one or two investors and they don't offer the type
of mortgage you need? Worse, what if you need to change your loan system AFTER
you started the process? If your mortgage broker has many investors will allow
you to face these issues without having to go through the whole process again.
4. Buying an new car or purchasing a big item before
you apply for a mortgage
A lot of people think that it is in their best interest to complete large
purchases before applying for their mortgage. One of the key components in
determining the amount of home you can qualify for is your total debt. Big
purchases should therefore be done after your house purchase has closed. In
fact, you will be in a much better position to assess your needs after you
purchase your house. So many things can go wrong...
5. Over shopping your mortgage loan
When a new possible lender needs information on you, he will have your credit
report pulled. The problem here, is that every time your credit report is
pulled, there is a possibility that your credit score will decrease. If your
credit score decreases, your chances of getting the best rate and terms are also
decreasing. Mortgage experts recommend that you choose a mortgage broker who has
a good number of investors and that you limit your shopping to that broker.
6. Not revealing all the facts to your mortgage broker
Who hasn't experienced some moments of financial difficulties at some
point in the past? While it may be embarrassing to reveal such issues to your
mortgage broker, you have to keep in mind that he/she is there to help you to
get loan approved... despite such issues. Your mortgage broker will certainly
not be able to help you with those issues if he knows nothing about them.
7. Not paying on time
Not paying on time, or late payments, in particular those done within the last
year, can be very detrimental to obtaining the best loan rates, terms and, in
some cases, can even make the difference between being approved or not. Even if
this looks like unnecessary advice, always, and we mean ALWAYS, pay your bills
on time.
8. Credit cards
Credits cards are used everyday by a majority of people to make purchases, they
are convenient, secure and easy to use. When you apply for a mortgage if your
credit card balances are not paid off or kept low, you might find it more
difficult to get the best rates and terms on your mortgage. If you keep your
total debt as low as possible, it will help you get the mortgage that best meets
your specific needs.
9. Too many credit cards
When a lender studies your mortgage application, he basically wants
to find out how much money you can borrow without putting yourself in a default
position. The amount you can "borrow" with your credit cards is therefore an
important factor - event if you don't use your credit cards. Why? Because you
could... The total amount you could "borrow" on your credit cards should be kept
low.
10. Cosigning on a friend's or loved one's loan
Your friend or your loved one will certainly be happy, but when you
give such a guarantee to someone else, you are, in effect, assuming the
liability on that loan. Your total loan potential will be lesser than if you
didn't cosign.
It's important to get all the facts before you contract a loan. Find out what
will be the total cost of your mortgage loan, including at closing and for the
life of the loan. Not all mortgages are alike, there are many subtle differences
which can save or cost you thousands of dollars. Get all the facts and know what
to expect.
DISCLAIMER: The information contained herein is deemed accurate and correct, but
cannot be warranted against changes subsequent to the time of it's publication.
This material is not intended or offered as legal, investment, real estate,
mortgage, insurance, tax, or other advice. The author and the publisher assume
no liability for the use (or misuse) of the material contained in this
publication or related materials. This material is not warranted for any
particular or general purpose whatsoever. Viewers of this material assume any
and all risks for any use of this material.
