Sometimes it is easier to focus on what to avoid, rather than trying to understand all the information out there about mortgage loans. That’s why we list the seven common mistakes that you should avoid.
1. Do your Homework
Buying a home with financing is one of the most important transactions of your life, so you need to decide on and compare options. Usually in new housing developments will offer a mortgage product; most people are left with this option or request that recommends a friend or family. Avoid taking any decision without consulting at least three options to choose the one that fits your needs and credit profile.
2. Sign a Purchase Contract without ensuring your Credit
It is customary to visit houses first and then solve the issue of credit. This can cost you if you are not well advised. One of them, the most serious, is to sign a purchase agreement without being sure you authorize the credit.
Typically these contracts have penalty clauses, if not satisfied with the payment in a timely manner, and if for some reason you were not eligible for credit may incur them. The best practice is to authorize your credit, advice and then sign your contract safely.
3. Focus only on the Interest Rate
This is one of the most common and serious mistakes made. It’s easy to see why. The interest rate affects what you will be paying over the life of the loan, as well as other costs seem minor in comparison. But they add up, and sometimes a lot.
In fact advertising is done by the institutions is to show off his low interest rate but if any additional costs are added can be more expensive than other products with a higher interest rate.
4. Consider Closing Costs
Many people do not contemplate them and when they are hard pressed to enter your credit. Do not let the way you pass, anticipate how these expenses relating to notary fees, appraisal, credit origination fee and the difference between what you grant credit and the final purchase price.
Learn all about these extra costs
5. Not knowing your Credit
Although you are aware that you have not defaulted on your credit commitments, it is recommended that checks your history, because sometimes there are errors on the part of institutions and perhaps there is a cautionary note.
6. Don’t know the Process
If this is your first mortgage operation is normal you do not know the process to acquire it and sign it. There are many times and players involved: the mortgage consultant, real estate consultant, the measuring unit, the bank and the notary. What usually happens is that the simplest images or shorter than it actually is process. You can meet here.
7. Yielding to Pressure
Real estate agents, mortgage brokers and you are interested in closing your transaction, and times are important, there is nothing wrong with that. The trouble is trying to press with a mortgage you’re not convinced or accelerate without a clear and well planned disbursement you have to do to sign your scripts and unbalance your family finances.