Paul Watson
Did you know that 12.3 % of homeowners bought a new home in the last year? It’s no secret that the real estate market has been hot, and shows no signs of cooling down. And many people who are buying are also shopping for mortgages, too, which means increased competition.
Are you trying to get a mortgage? Finding the right one for your financial situation requires knowing what not to do. Here are the top five mistakes in mortgage shopping and how to avoid them.
- Ignoring Incentive Programs
When looking at options for mortgages, don’t overlook the programs that your state offers. Whether it is a VA or FHA loan, or ones for first-time buyers, you should see what you qualify for. And many mortgage brokers can hook you up with down payment assistance or other perks.
- Not Having Finances in Order
Before you apply for a mortgage, make sure all of your finances are in order and that your credit is good. Don’t take out any new loans or lines of credit, or rack up major charges on your credit cards that you can’t pay off right away. It’s also not the time to switch jobs or quit your job if you want to paint an appealing financial picture for potential lenders.
- Avoid Making Interest Rate Mistakes in Mortgage Shopping
Before you decide on a mortgage, it’s important to understand the difference between fixed-rate vs. adjustable-rate mortgages. Many homeowners choose a variable rate or adjustable-rate mortgage (ARM) because of the low rates. But the reality is, you must review the mortgage loan terms because ARMs will fluctuate while fixed-rate ones will not.
- Forgetting About Fees and Closing Costs
In the excitement of securing a mortgage, many people forget about comparing mortgage costs and asking about the fees and closing costs associated with it. Some mortgage brokers tack on significant fees, so request that in advance before you get too far into the process. They should also give you an estimate of the closing costs upfront as well.
- Skipping Research and Reviews
Part of your mortgage shopping strategy should be doing your research and reading online reviews about the potential banks, mortgage brokers, and other lenders online. Find out what other customers are saying about their experiences dealing with them so that you can get a sense of what to expect. Check out their websites first, like the one at Payitforwardlending.com to learn more about their services and experience.
Ready To Find a Mortgage?
Now that you’ve learned about the top mistakes in mortgage shopping, you can make an informed decision about what kind of mortgage works best for you. Be a savvy shopper and do your research about interest rates and the different types of mortgages. Don’t forget to ask about closing costs and fees before agreeing to a mortgage and lender.
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