Don’t make any of these mistakes. You can’t afford to do anything wrong when your applying for a mortgage loan. Many people apply for a mortgage thinking that as long as their credit is fine there’s nothing to be worried about. Unfortunately, the other factors you don’t think about are the ones that usually stop the mortgage from going through.
Here’s the top 11 Deadly Mistakes people make When Applying for a Mortgage, and what you can do to prevent them from happening to you…
1. Not Knowing How Much Money You Can Put Down
Do yourself a huge favor and sit down. Go over your finances. Now, get a clear number that you can afford to put down as a down payment.
Keep in mind that the larger the down payment, the better rates and terms you’ll receive.
2. Working With A Mortgage Broker Who Has A Poor Performance Record
A huge reason many mortgages don’t go through is solely based on the Mortgage Broker and his/her work practices. Don’t choose a Mortgage Broker without asking for a performance track sheet and a performance guarantee.
3. Not Understanding The Process
How often do you shop for a mortgage? Not very often, huh? So, chances are, you don’t have much experience in the process. And That’s exactly what you have to remind yourself when starting the process of applying for a mortgage loan.
This doesn’t mean you have to spend your nights researching mortgage processes. Just be aware that you’re not nearly an expert on it, so make sure you choose a mortgage broker who DOES have A TON of experience, and ask questions…often! As much as they come up!
4. Working With A Lender Who has Only One Investor (Wells Fargo, Chase, BofA, Etc.)
Not all lenders have a range of options when it comes to investors. What if that investor doesn’t offer the type of mortgage you need? Or worse yet, what if you need to change loan products after you’ve started the process?
Working with a mortgage BROKER who has many investors enables you to address these issues without starting the process over again.
5. Making Large Purchases Prior to Your Mortgage Application
Many people think that it is in their best interest to get large purchases completed prior to applying for their mortgage.
As total debt is a key component in determining the amount of home you qualify for, it’s best to wait until after your home purchase has closed to make such purchases.
6. Over Shopping Your Loan
Each time you call a lender seeking the best possible rate and terms you have your credit report pulled. Every time your credit report is pulled you risk decreasing your credit score and thus possibly decreasing the likelihood of getting the best rate and terms.
Experts recommend that you select a mortgage broker with a number of investors and do your shopping with her/him.
7. Hiding Things From Your Mortgage Broker
Most of us have experienced times of financial difficulty at some point. While it can be embarrassing to discuss issues like this, your mortgage broker is there to help you get loan approved despite such issues.
Remember – Your mortgage broker can only help you with those things with which s/he is aware.
8. Making Late Payments
Late payments, especially those within the last year, can be very detrimental to getting the best rate, terms and even the difference of being approved at all. While this might seem like unnecessary advice, ALWAYS pay on time.
9. Over Using Credit Cards
Credit cards are a convenient way to make purchases, but if not paid off or balances kept low you might find it more difficult to get the best rates and terms on your mortgage.
Keeping your total debt as low as possible helps you get the mortgage that best meets your specific needs.
10. Cosigning On Someone Else’s Loan
It’s a big deal when you’re asked to help a friend or family member move into their first house or apartment, or get a much needed new car or piece of furniture, but signing to guarantee someone else’s loan is very dicey. If it the outcome is adverse, it’s going to be a big head ache for the you, as the cosigner.
Before cosigning you decide if you’re willing and/or able to assume the liability.
11. Not Getting All The Facts
It is important to learn the total cost of your mortgage loan, both at closing and for the life of the loan. While mortgages can look a lot alike, there can be subtle differences that can save or cost you thousands of dollars. Get all the facts and know what to expect.