Top Six Mortgage Mistakes to Avoid
1. SEARCHING FOR A HOME BEFORE BEING PRE-APPROVED
When looking to purchase a home being competitive is important. Having a full mortgage pre-approval for a home loan can put you at the top of the hierarchy. If you have not been pre-approved, the seller has no knowledge of whether or not you can afford to purchase their property and may not take your offer seriously. A pre-approved buyer has proof that they are able to purchase property and lets the seller know that you are serious.
2. CHANGE IN EMPLOYMENT
Steady employment history is very important to a lender. Having consistent monthly income shows a lender that you will be able to make timely payments on their mortgage in the future. Don’t change jobs prior to closing on your new loan.
3. NOT LOCKING YOUR RATE
Mortgage rates change daily, if not multiple times daily. You may receive several quotes from your lender but until you lock-in your quote that’s what they are, just quotes. Once you have your rate locked-in, it is guaranteed for a certain period of time.
4. EXPLORING YOUR OPTIONS
If you fail to explore all of your financing options you could be missing out on available options. Take the time to understand the benefits associated with different loan programs. For instance, FHA mortgage loans require lower down payments while conventional mortgage loans offer more affordable mortgage insurance, if required.
5. NEW CREDIT
Applying for new credit (auto loan or new credit card) during your mortgage application process can negatively affect your credit score and compromise your eligibility. Wait at least 30 days after you close to apply for or obtain any new credit.
6. NOT READING THE FINE PRINT
It is the sole responsibility of the buyer to understand and accept the terms of their mortgage. Not understand what you are entering into could be detrimental to your financial future. Reading through the loan documents may be a long and tedious process but it will greatly benefit you to do so. Before closing, make sure you completely understand what you are signing.
United Home Loans is licensed to provide mortgage loans in Illinois, Indiana, Michigan, Minnesota and Wisconsin. If your looking for more information on purchasing or refinancing, contact us below or at 708-531-8388.