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Eight Things to Avoid When Getting a Mortgage Loan

Posted by  on Jun 17, 2009
 

Searching for a home loan is best undertaken with care. Avoiding the following mistakes can help you avoid problems and extra expenses when shopping for a home mortgage or refinance:

  • Focusing on rates alone: Only you can assess your financial readiness to buy a home. Rushing in too soon can cause financial headaches later.
  • Not paying down debt before looking for a mortgage: Ideally, you should owe little or no consumer debt when you shop for a mortgage. It can be worthwhile to postpone buying or refinancing in order to pay down or eliminate consumer debt.
  • Not knowing your credit scores: Lenders may require a credit score of 740 or above to get the best mortgage rates.
  • Not understanding the mortgage loan process and its terminology: Points. closing costs. loan features--these are some of the terms and concepts you'll want to know before looking for a mortgage.
  • Not doing your "home work": Before contacting mortgage lenders, it's important to explore mortgage loan options and to compare rates using online mortgage calculators.
  • Not shopping with multiple lenders: Lender fees and mortgage options vary, so it's important to shop several lenders before accepting a mortgage loan.
  • Looking at homes before shopping for a home loan:You can potentially save money and avoid disappointment by getting pre-qualified for a mortgage loan before looking at homes.
  • Forgetting to consider closing costs and down payment requirements: The more can pay toward closing costs and your down payment, the better your chances of getting the best mortgage rates.

Finding the home you want and getting a great deal on a mortgage takes planning, dedication and a little luck, but avoiding common oversights and problems can put great mortgage rates within reach.

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