Five More Common Mortgage Mistakes

By:
JR Hevron - MortgageLoan.com
Five more common mistakes that people make during the mortgage process.
 
Last week, we talked about a few common mistakes that people make when going through the process of getting a home loan. This week, we’re back with five more common mistakes to watch out for.
 
Again, the mistakes here don’t just cost you money and make it harder to get the right mortgage for you, they can also make the process take a whole lot longer, which can cost you the house that you want.
 
Mistake #1: Getting the maximum loan
When you are looking for a mortgage, many lenders will start you off by computing the maximum loan that you qualify for. Just because you can get the maximum doesn’t mean that you should! Many potential homebuyers make the mistake of getting that maximum loan for a home and later get into trouble.
 
Home ownership is just one part of your financial life. Maxing yourself out on a huge house might siphon away money that should go to things like college savings, retirement, vacation, etc.. Don’t get talked into more than you need and then regret it later when you have to sacrifice in areas that might be more important in the long run.
 
Mistake #2: Just getting a loan based on the rate
This is another mistake that comes from looking too narrowly at your mortgage. While you may have found a loan with a great rate, be sure to consider all of the other factors. What are the fees involved? What are the estimated closing costs? How easy is the lender to work with? What is the broker’s fee? It’s easy to think that you’re getting a good deal if you just focus on the rate.
 
Mistake #3: Not understanding the difference between an Adjustable Rate Mortgage and a Fixed Rate Mortgage
Many, less-savvy homebuyers have been lured in by the low introductory rates of Adjustable Rate Mortgages. Then, months later, they’ve found themselves struggling to come up with increased monthly payments when the interest rates have gone up. There are many websites and books out there that can help you to understand mortgage terminology. Read them carefully and understand that risks that come with the different types of mortgages before you commit to anything.
 
Mistake #4: Not locking in the rate
So, you’ve settled on your mortgage, considered its place in your long-term financial goals, and you’re happy with your rate. Don’t send yourself back to step one by losing out on that rate!
 
It can take months and months to file all of the necessary paperwork and get approvals. During that time, all kinds of things can change, like your interest rates, your income, your credit ratings, and your loan-to-value rations.
 
One way to maintain that attractive rate is to lock it in. A rate lock is a legally binding thing and can happen at almost any time in the process. It can also last for different amounts of time depending on the terms.
 
Mistake #5: Not getting promises in writing from your real estate agent, broker, or loan officer.
In short, make sure that you get any promises in writing. If it sounds too good to be true and the person won’t put it in writing, then it probably is too good to be true. While there are some situations where verbal real estate promises have been legally challenged—prevent yourself from getting into that spot in the first place.
 
Unfortunately, a person can make any number of costly mistakes during the mortgage process. It’s a complicated transaction and more often than not, the people involved aren’t looking out for your best interests.
Fortunately, the more that you educate yourself to understand the process, the better equipped you’ll be to avoid these (and many more) common mistakes.
 

Start here to compare mortgage rates from top lenders in our network

More Mortgage Rates Articles

Low Mortgage rates is our mission

Bringing the best rates on the market to
you is our primary focus. Fill the form to get a quote based on your conditions.
/Mortgageloan.com

SecureRights Policy

  • New Home

    Looking to get on the property ladder? Discover your spending power. Get a rate quote today.

  • Debt Consolidation

    Are your debt woes getting you down? Explore your options now by filling out our form.

  • Home Equity

    Is fluctuating home value a constant cause for concern? Our advice - take out a new loan today.

  • Mortgage Calculators

    Need help getting a grip on your expenses and finances. Try one of our 137 multipurpose calculators.

Call For Rates

800-419-1494

Speak to a lender now.

We will match calls to our toll free number with our network of lenders.

See Today's Rates

National Rates

Loan Type Today +/-
30 yr fixed 3.69
15 yr fixed 3.00
5/1 ARM 2.75

Rates may contain points

Compare Rates »

Browse Mortgage Rates

Mortgage Rates Calculators