Mistake #1 - Borrowing Too Much / Not Thinking Long-Term
The first mistake most people make when obtaining a mortgage loan is not determining their comfort level with a given payment amount. How much are you willing and able to shell out each month for your mortgage? Just because a lender offers you a $200,000 loan with a $900 payment doesn’t mean you HAVE TO buy a $200,000 home. We recommend a more conservative approach. And even if you think you can afford $900/mo right now, you need to re-think it while factoring in future considerations. What if the economy takes a down turn? What if you or your spouse is temporarily out of work? What about other purchases and savings? If you pour all of your resources into a monthly mortgage payment, how can you afford to save for your retirement or your children’s education? This is why you should seek the advice of a mortgage expert. He or she can sit down with you, assess your needs and long-term goals and offer the best loan for those needs.
Mistake #2 - Failing to Ask Critical Questions
There are a few important questions you need to make sure you ask your mortgage company. Question 1: Is your mortgage portable? In some cases, your mortgage may be “portable”, which means you can carry it with you when you buy your next home and avoid having to obtain a new mortgage. NOTE - These types of loans are not available in all cases. Question 2: Is your mortgage assumable? The term “assumable mortgage” means that when you sell your house to a buyer sometime down the road, the buyer can “assume” your mortgage, instead of having to apply and receive their own mortgage. This is very attractive to some buyers and may help you during negotiations. Question 3: Is there any “pre-payment penalty” if I decide to sell or refinance my home before I have paid off my existing loan? This is a very important question, since you might be forced to pay a penalty if you pay off certain types of loans before they are due.
|
| Mistake #3 - Not Seeking Out “Alternate” Payment Plans
Did you know that with certain loan types, you can shave off years of payments and thousands of dollars in interest? It all depends on what payment schedule you pick. Using additional payments and/or “bi-weekly” payment programs can save you enormous amounts of money and time. For example, with a bi-weekly payment plan, you could save up to $46,701 on a $125,000 loan!!!
Mistake #4 - Not getting Pre-Approved by a Reputable Lender
In some areas, a seller may not even deal with you until they can verify that you can actually afford to purchase their home. To them, a pre-approved buyer is essential. But even in cases where pre-approval is not mandatory, it is still wise to consult with a reputable mortgage company and receive a pre-approval. Especially considering that the pre-approval process is fast and easy…not to mention FREE! Once you are pre-approved, you can embark upon your home buying journey with confidence, knowing that once you find your dream home, obtaining the money to buy it will be the easy part!
|
