Avoiding Mortgage Mistakes
Whether you’re a first-time homebuyer, an experienced real estate flipper or anyone in between, the process of obtaining a mortgage and purchasing a home is a complex one that requires some attention to detail. It’s also one where a few pitfalls are definitely possible if you aren’t careful, and avoiding these is important for ensuring you find yourself in a good situation.
At Altius Mortgage and our partners with Mortgage Ogden, we assist clients with a huge range of mortgage services, from finding their ideal home loan to navigating the process of homebuying — and even refinancing a mortgage if needed. What are a few of the most common mistakes we see from clients during any part of this process, and how can you be sure to steer clear of them? Here’s a basic primer.
Credit Errors
There are a few different ways your credit can come into play during the mortgage process, and making errors with it is one of the more common mistakes we see. For example, some people assume that closing unused lines of credit will improve their score — but this can actually have the opposite effect.
Additionally, maxing out your credit cards or opening new lines of credit too close to applying for a mortgage can also ding your score and make it harder to get approved. The best way to avoid credit mistakes is simply to check your report well in advance of beginning the homebuying process, and dispute any errors you find.
Improper Down Payment Savings
Saving up for a down payment is often one of the biggest hurdles to buying a home, but it’s important to make sure you’re doing it in the right way. For example, if you have money saved in an account that would penalize you for withdrawing it early, it may not be the best idea to use those funds for your down payment.
Furthermore, be sure to keep your down payment money in a safe place where it isn’t subject to loss — you don’t want anything happening that could derail your homebuying plans at the last minute.
Not Getting Pre-Approved
Many people believe that they can just start shopping for homes and see what kind of mortgage they can get approved for, but this is actually backwards. It’s much better to get pre-approved for a mortgage before you start looking at properties, that way you know exactly how much you can afford to spend.
Not only does this prevent you from falling in love with a home that’s out of your price range, but it also gives you a leg up on other buyers who haven’t taken this step. In a competitive market, being pre-approved can be the difference between getting your dream home and being left out in the cold.
Failing to Budget for Mortgage Insurance
If you’re putting less than 20% down on your home, you’ll likely be required to pay for mortgage insurance. This protects the lender in case you default on your loan, but it’s an additional expense that can add up over time.
When budgeting for your new home, be sure to factor in the cost of mortgage insurance and plan accordingly. It’s one more thing to keep in mind as you navigate the process of homebuying.
For more on how to avoid common mistakes during the mortgage acquisition and homebuying process, or to learn about any of our mortgage programs or fantastic mortgage rates, speak to the pros at Altius Mortgage today.
Want to learn more about this? Check out our other past blogs on the same subject:
