A fast run-down of the top mistakes to avoid when applying for a home loan.
A mortgage is a loan secured by your home. It's the financing we need to buy a house. There are many options when shopping for a home loan. What matters is that you're qualified and that your rates are great. It's important to speak to a mortgage advisor who can guide you through the process and answer any questions you might have.Verify my mortgage eligibility (Aug 12th, 2022)
Mistake #1: Applying for an Unsuitable Loan
Do you wish to avoid getting a loan that is beneath your expectations? Is your mortgage advisor asking you how long you plan to live in the house? Is this a long term purchase? Do you think you might move when you have kids? Do you have a plan for how you'll pay off the house? Perhaps you are thinking about turning it into rental property in the future. How does purchasing this house fit into your financial goals? How does this home loan fit into your long term goals?
Are you considering an FHA loan when a conventional loan, with a 3% down payment may be a better option for you? Do you earn your income in a way that suits the type of mortgage you're applying for? Have you had bad credit in the past?
Applying for the right mortgage is important. There is no reason to opt for a 15 year fixed rate mortgage if you don't intend to pay off your house as one of your main financial goals. If you qualify for a low down payment conventional home loan, don't choose an FHA option. Have you considered a VA home loan as a veteran?Verify my mortgage eligibility (Aug 12th, 2022)
When you speak to your lender about other mortgage options, how much you need at closing, and where that money should go, these extra few minutes can save time and indecision in the future. Once you learn about all your borrowing options, you'll be able to evaluate which loan is right for you. And then purchase home confidently.
Mistake #2: Not Being Prepared for Your Closing Costs
Besides the down payment, there are other expenses when you buy a home. When buying a home, there are usually also fees for title insurance, an appraisal, lender fees & homeowners insurance. Have you allocated enough money to cover these costs as well as your down payment? Is your mortgage program requiring you to have a few months of the payments saved? How much in property taxes will you owe at the closing to be current? How much will your per diem interest be? Will you have enough money to do some of the decorating you want to when moving in?
The idea of parting with your savings is difficult to stomach, but you might need to in order to buy a new home. Are you ready? Should you keep some money in your savings account to help cover the costs of moving into a new home?
Your mortgage advisor should be preparing you for the full cost of buying your new home including transaction costs. Don't put too little down, or too much down when buying a new home.Verify my mortgage eligibility (Aug 12th, 2022)
Mistake #3: Choosing the Wrong Interest Rate Type
Have you chosen a fixed rate when an adjustable rate would have been more suitable for your situation? While adjustable-rate mortgages can be used when they are appropriate, do you think a fixed rate is best?
Are you considering a 30 year mortgage when a 15 or 20 year one may be better for your needs?
Are you considering a 15 year mortgage when a 20 or 30 year one may be better for your needs?Show me today's rates (Aug 12th, 2022)