Are you thinking about buying a home? Save yourself time, stress and money by avoiding these six all-too-common mortgage mistakes:
1. Skipping the Pre-Approval Process
It’s important to secure a mortgage pre-approval before heading out looking for your new home for several reasons:
You’ll know how much you can afford
You can make an offer immediately (not having a pre-approval may cost you your dream home)
You won’t look at homes above (or below) your price rangeYou’re guaranteed a locked-in rate for 30-120 days
2. Applying For New Credit
Don’t make the mistake of applying for any new credit until you’ve closed on your new home (this includes car loans, credit cards, lines of credit, etc.). As new loans impact both your credit score and your debt to income ratio, they can threaten your ability to secure a mortgage.
3. Changes in Your Job
Changes to your employment can also impact your ability to secure a loan. This is because lenders see applicants with reliable, stable income as “low-risk” and, therefore, better candidates for a mortgage. Job changes may include opting to become self-employed, a reduction in hours, dismissal, etc.
4. Not Doing Your Research
Another common mistake home buyers make is failing to learn which loan products will best suit their needs. Fixed vs. adjustable rate? Open vs. closed? Convertible or hybrid? Here again, understanding your options can save you thousands in the long run.
See Mortgage Basics: Types of Mortgages for more information.
5. Failing to Compare Mortgage Rates
Let your broker do it for you! (More on that below).
6. Not Using a Broker
Save time, money and mortgage-related stress by enlisting the help of an expert mortgage broker. Not only will they work hard to secure perfect loan (at a great rate), but they’ll also provide endless support and guidance throughout the mortgage process – ensuring you get the right product for your unique situation. See our previous post, “Buying a Home? 6 Great Reasons to Use a Mortgage Broker” to learn more.
Find out how much home you can afford with the help of our free mortgage calculator. Or, begin the mortgage application process today by filling out our online application (it only takes a few minutes)!
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