Thursday August 14, 2014
Securing a mortgage can be a bumpy road. Not every borrower’s path is the same, but generally speaking, there are a few key mistakes made by homeowners that can be avoided. Here are five of the most common mistakes:
Not checking credit reports. Waiting until you apply for a mortgage to check your credit can be a deal breaker. Credit report errors happen all the time, but you do have the ability to correct errors and increase your score, which will help you secure a lower, more favorable interest rate.
Waiting for the lowest rate. Mortgage rates fluctuate all the time, and my borrowers wait for rates to hit “bottom” before making a move. Unfortunately, interest rates continue to be on an upward trend, and more than likely the market’s “bottom” can only be realized after the fact.
Failing to lock in a rate. Once you’ve seen a rate that is most favorable, a huge mistake is not locking in that rate. Timing is very important, especially if you’re building a home.
Mis-truths. False statements on mortgage applications can come back to bite you, to the tune of jail time, a $1 million fine (or both), and a completely ruined credit score (as if it matters at that point). Quite simply: don’t do it.
Lastly - going in blind. There are a lot of costs involved in finalizing a home purchase. Above just the annual percentage rate (including actual interest and any additional costs), you may also incur closing costs, commissions, points and other fees that may not be included in the mortgage.
Do your homework, and work with Faber’s experienced professionals who will help walk you through the process.