So you have found the home you like and have placed an offer with the real estate agent, now you need to head to your lender and get a mortgage. However, sometimes the process doesn't go that easy.
While dealing with a lender you know can be reassuring, you should also make sure you've done all the comparisons possible before getting a mortgage. Why? Your lender will make a lot of money from your mortgage loan through your interest, so you should make sure you get the right mortgage loan.
Consider how you can avoid the common nine mistakes that many
people make.
Take the time to research your
lender
Your mortgage loan is one of the most important and largest financial commitments of your life. You want to make sure you are choosing a reputable lender. Have customers been satisfied? Have any complained about how mortgages are handled? Having a good relationship with your lender is extremely important.
Back to top
Never
fall for the promise of low rates
Getting a low rate on your mortgage is important. However, you want to know whether the low rate is guaranteed and for how long, especially if you are getting pre-approved. This will affect your house hunting process. If you are only guaranteed the low rate for a period of one week then you probably won't find your ideal home in this short time frame. When a company promises to hold your interest rate for a certain period you want, make sure you get it in writing. If you don't get the guarantee in writing, your lender can try to change the interest rate during closing. The best lenders give you time during closing and promise to hold your interest rate.
Back to top
You think
a program is right.
Often you will find several programs with special low-interest rate options. Beware that these may not necessarily be the best programs. Have your lender explain to you which programs better serve your specific needs and why they feel the programs are right.
Back to top
Not comparing
fixed and ARM mortgages and just accepting fixed rates.
Most people think a fixed mortgage rate is better than other options; however keep in mind your unique situation. The most important thing to consider is how long you are going to live at the property. For most first time homebuyers, the average is less than four years. For this period of time or less, it can be a good idea to get an ARM mortgage. If you plan to stay in the home longer, then you should consider a fixed rate mortgage.
Back to top
You guessed
on the mortgage market.
It is very difficult to time the market which is why you will find a lot of investing advice and with uncertain conditions; everyone wants to make the right decisions. The same holds true for mortgage rates. Many try to guess when rates are the lowest before attempting to lock in the rate an often individuals will wait too long and this results in higher interest rates when people are finally ready to buy. Floating isn't a bad thing, but you need to pay careful attention to what is happening. It can be a good idea to lock in your rate as you near the closing period on your mortgage loan.
Back to top
Before
closing, you don't negotiate all problems.
This is the most common mistake many make, as often an issue will occur before you close your mortgage deal, possibly a problem after your inspection or you might have paid for a feature that isn't included. This is the perfect time to take on any such issue. When you discuss a solution before closing on your mortgage, you will have time to analyze and determine all options available to you.
Back to top
Remember
to include the cost of closing in your budget.
This can be a very costly mistake. Often closing costs can be between two to six percent of your purchase price depending on your lender's fees and other related factors. It is a requirement that lenders give you a "Good Faith Estimate" of your closing costs. This way you can know what to expect when closing your mortgage deal, although your lender may not know all the closing costs associated with your specific situation. Ensure that you account for a little more than you're "Good Faith Estimate" when setting aside money for closing costs.
Back to top
Do not
close your mortgage deal early in the month.
It may not seem like it, but this mistake can make a significant difference. After closing your deal, your lender charges prepaid interest for the recorded loan data through to the end of the month. Therefore, if you want to get lower closing costs you need to close your mortgage as late in the month as possible in order to decrease the prepaid interest you need to pay.
Back to top
Do
not close your mortgage deal early in the month.
This can be another costly mistake. Have you noticed fees in your mortgage contract that were not explained? These hidden fees can end up costing you hundreds of dollars. Remember this is money you may need for other financial expenses. If you are being charged fees then you shouldn't be afraid to ask questions or get complete explanations before paying them.
Back to top
| Essential
Guide to Mortgage Information |
|
|
 |
Please contact
us and we can help you get a free mortgage pre-qualification. |
|
|
Fair Housing and Equal Opportunity | Site Map | Glossary | NYS Agency Disclosure
