Most people consider their house a castle, do you? Others that have made huge mortgage mistakes think it is their albatross. Is that where you stand? Yes, the answer may depend on the mistakes, if any that you have made when it comes to your mortgage. If you bought a real estate property and got a good deal, you may think differently, but for some people, it is a nightmare.
Purchasing a Home
For those who have purchased a home and did not understand the mortgage terms and agreements nor could they afford it, they may tell you that since then, there has been nothing but tears, agony and frustration. If you have not yet purchased your first home and in the market to do so soon, it is important not to make the following mistakes when it comes to your mortgage loan.
The Credit Review
Before you even approach a lender, you should personally review your credit. The lender will and if there is anything found on the credit report that will hamper your approval, then that is when you will find out and it may take months to fix it. So, it is best to pull your own credit from the three major credit bureaus: TransUnion, Equifax and Experian. This is the first mistake that first time home buyers make. When you pull your credit report, you will also see your FICO score, which is instrumental in getting a lower interest rate.
Before you go hunting for a real estate property of your choice, you should get a preapproval letter from the mortgage lender. It will help you to get the home that you can afford. It also speeds up the entire process of buying a home. The real estate broker will take you more seriously with a preapproval letter and it gives the seller more confidence to trust you.
Shop for the Best Rate
Yes, your interest rate is important to your mortgage because it determines your monthly premiums. You want as low an interest rate as possible, so shop around first for the best rate. This is the same thing you would do if you were buying a vehicle or furniture for your home.
Many home buyers ignore the mortgage fees such as the fee for county recording, application and loan origination fees and the appraisal fee. These can add up substantially, even though, most of them are mandatory. Some are fixed, but others can be negotiated. So, pay attention to the fees. Ask for a copy of your good faith estimate, which has a detailed list of all the fees. Take time to review them before you go to closing.
The Down Payment
It is better to save up your down payment before you get a mortgage. It reduces your mortgage payment and shows the lender that you are a serious shopper. Make sure you have at least five percent of the mortgage amount to put down. When you have nothing to put on the table, it tells the seller to beware.