Taking out a mortgage on a home or any other building can be a wise and profitable investment. It can also turn out to be disastrous if you are not careful. Whether you are buying a home in California or one of the Steel Buildings in Houston, be careful not to fall prey to these seven mortgage mistakes.
Not Researching Your Lender
Choosing a mortgage lender is one of the most important decisions of your life, so there is no need to rush. Take time to determine your needs and preferences. Read plenty reviews and policies of lenders before making your decision.
Falling For The Trap Of Low Rates Without Reading The Fine Print
Low rates sound tempting, but there is sometimes a catch. They are available for a limited time, so you need to work out where you are paying money, when and whether you are really saving. It is also advisable to get it in writing. This is especially true for pre-approved loans. Because they are only for limited time, ensure you will have enough time to find a home. These deals are best for those who already have a home in mind.
Not Choosing The Best Program For You
It is essential to know what your situation is, and what you are looking for. There are pros and cons to every program, so choose wisely. Do not be afraid to ask your lender all the questions you need to.
Not Comparing Fixed And ARM Rates
Fixed rates always sound like the wiser and safer option. Fixed is not invariably best for everyone. Consider the economy and the duration you plan to live at the property. If you are staying for the short-term, then ARM rates may save you thousands. Fixed-rates are better for long-term buyers.
Not Reading The Fine Print And Negotiating Before Signing Deal/ Not Querying Every Fee
The mortgage paperwork may be tedious, but every little detail counts. Take your time on this and make sure you are fully aware of every additional fee you agree to before you sign. These seemingly small charges may seem mandatory when they are not. Your temporary laziness to read the contract thoroughly could have you paying hundreds, even thousands of extra dollars a year.
Not Considering Closing Fee In You budget
While you may accept that certain additional fees will be worked into your monthly mortgage premium, the closing fee can be a nasty surprise if you did not consider it before. Make sure you discuss all fees, including the closing fee from the get-go.
Closing Deal Too Early In Month And Getting Trapped with Additional Fees
You may be eager to seal the deal, but closing earlier in a month can mean many additional charges. Closing early in the month will cause the lender to prepaid interest on the recorded loan data right up until the end of the month.
This will significantly increase your closing fee. Waiting another week or two can save you hundreds of dollars.
As you can see, avoiding making mortgage mistakes is just a matter of putting a bit more thought into it, doing a bit more research and calculating every cost.
Whether you are buying a cheap fixer upper as an investment, or a home for your family to grow into these arduous tasks are no waste of time or effort but essential to saving money and the distress of making the wrong choices. With a bit of extra care, taking on this mortgage can be the best decision of your life!