Getting a mortgage loan can be a stressful experience when you buy a house. The truth is, there's a lot about the whole mortgage loan industry than many consumers just don't understand. As a result, it's easy to feel confused and intimidated as you go through the process. But here are a few of the common mistakes that are made when getting a mortgage that you want to be sure to avoid.
1. Perhaps the most common mistake made when getting a home mortgage loan is not having done enough research about your own credit score in advance in order to clean up any problems before applying for a loan. If you know that you will be in the market for a home within the next six months or so, it's time now to get a copy of your credit history and review it thoroughly. Quite often, you'll find some errors and discrepancies that need to be cleared up. Doing this well in advance of actually getting the loan can help make sure that you get the best loan terms and rates possible as a result.
2. Many home buyers aren't aware that you can not only get pre-qualified, but also pre-approved, for a home loan before you actually buy. In this way, home loans are very similar to auto loans in that it often pays you to arrange your financing in advance instead of waiting till the last minute. By already been pre-approved for a mortgage loan, you stand your best chance of being able to get preferential treatment from the home seller when you make an offer simply because your financing arrangements are already in order.
3. A very costly mistake from many couples is buying more house than they can afford to pay for. Unfortunately, several borrowers these days will allow too much leeway in their loan guidelines, paving the way for people to saddle themselves with too much debt. Since you can't count on the lenders to have restraint in this area, you need to exercise it yourself. Rather than merely trying to qualify for a more expensive home, you will usually be well served by keeping your home costs in the area of about 25% of your total monthly income.
4. There are so many choices of mortgage loan companies and contracts these days, but it is amazing how few people really shop around to find the best mortgage deals for their needs. As a result, quite often many consumers find themselves stuck with mortgages that were meant for borrowers with poor credit, even though their credit score is very good. So be sure to shop around for your mortgage rates and terms, and know the interest rates that you are being charged.
These are some of the most common mortgage mistakes that are made by home buying consumers, and they can add up to a loss of several thousand dollars over the life of the loan. So follow the tips given above to make your best mortgage deal and protect your financial interests.
Steadman Issenburg writes on many consumer related topics including real estate. You can find out about low interest mortgage rates and compare mortage rates online and more by visiting our Real Estate website.
