Mistakes to Avoid

Purchasing a home is probably one of the biggest financial decisions you will make within your lifetime and you naturally want it to go smoothly. Unfortunately, many homebuyers look back on their home purchase with misgivings because they made some of the most common mistakes. You can avoid buyer’s regret and assure your home purchase and mortgage go off without a hitch by taking the time to educate yourself before hand.

First, resist the temptation to work with just any lender or only your local lender. Because this is a very important financial decision, it deserves some time and research. Look for a lender you know you can trust. Research them with the Better Business Bureau. Find out what others are saying about them. Put your home purchase in the hands of someone you know you can trust.

Be aware that low prices are not always everything when it comes to obtaining the right or best mortgage. Some mortgage companies frequently advertise low rates to lure in homebuyers but then pull a switch and claim that the low rate was only an introductory rate or locked in for a certain period of time. Always make sure you know exactly how long a rate is good for before going forward or you may find yourself paying more than you expected for your mortgage.

Take the time to always review your closing costs before you actually sit down to close the loan. Lenders are required to provide you with a Truth in Lending statement that discloses all of the fees. Make the time to read it line for line, item by item. If you’re not sure about something, ask about it. Don’t pay more for your loan than you should simply because the lender tried to cover up a fee and you didn’t investigate it.

Homebuyers are most frequently surprised by the amount of money they must pay for closing costs at the time the loan closes. Closings costs can range between 2% and 6% of your total home loan and typically include such costs as appraisals, surveys, inspections, title insurance, attorney fees, loan origination fees, etc. On top of your down payment, this can account for an additional several thousand dollars. Make sure you are prepared to fund this before you begin shopping around.

Finally, be aware that there are number of creative loan programs available for a variety of situations. Even if you are not eligible for a standard mortgage loan, there is a good chance you may qualify for a different program. Always be sure to ask.

 
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