10 Biggest Mortgage Mistakes First-Time Home Buyers Make

Buying a home is the biggest purchase most people
will ever make;
yet many go into it blindly!?
HERE ARE THE 10 BIGGEST MORTGAGE
MISTAKES FIRST-TIME HOMEBUYERS
MAKE & HOW TO AVOID THEM!
www.NorthcliffRealEstate.com

 A credit score is calculated by
looking at a number of financial
statistics, such as one’s payment
history, new/old credit, amount
outstanding, types of credit,
length of credit availability, to
name but a few.
 The better the score, the lower the
interest rate at which you will
borrow; and subsequently,
the lower the credit score, the
higher the interest rate!
 Based on a study by U.S. PIRG, a
shocking 80% of credit reports
(that’s 4 out of 5!) contains errors!
 Set aside about 6-12 months
before you start applying for
mortgages!

While there are quite a few reasons
why a bigger deposit is beneficial to
the home buyer, here’s a short list of
the 5 most important ones:
 Ease of approval
 More favorable interest rate
 Lower monthly mortgage payments
 Reduce mortgage insurance
 Avoiding negative equity
Doesn’t it just make financial sense to
avoid using a low or zero down
payment?!

 A lot of home buyers don’t
necessarily think everything
through when applying for a
mortgage loan. Financial
institutions, on the other hand,
will closely look at an applicant’s
current outstanding debt, and
bring it in relation to their
income.
 If there’s one lesson to be learnt
when applying for a mortgage
bond, try to pay off as much of
your credit card debts and other
types of debt before you start
with the mortgage application!

 It’s rather advisable to avoid
interrupting one’s employment
during the mortgage loan
application.
 Even if you feel horrible at your
current job and you’re ready to
tell your boss his fortune: do not
change jobs until you’ve closed
on the home loan!
It really comes down to one word:
stability.

 How much house can they
afford with their income? How
much are the monthly taxes and
insurance? How about basic
maintenance? Or unexpected
maintenance?
 Home buyers should get a pre-
approval prior to the start of their
home search, so they’ll know how
much house they can afford.
Ideally, they should not try to
maximize that amount, as one
needs to realistically calculate in
some extra monthly expenses.

 As tempting as it might be to
start shopping for new interior
decorations and furniture for the
new house, any large purchases
will be flagged and hit your credit
score.
 Paying with card would adjust
your outstanding debt; paying
cash could potentially signal a
flag when your cash reserves are
being monitored during this
critical time!
 One of the biggest mortgage
mistakes home buyers make is
purchasing a new car or living
room leather furniture set!

 The day you get your loan (which
tends to be the same day you take
ownership of your new property) is
pretty much the loan closing. At that
point, you’ll need to have the
necessary funds to pay for closing
costs, such as lender fees, attorneys
fees, title insurance, pre-paid
homeowner’s insurance, taxes etc.
 All-in-all, you’ll probably be
looking at 2-7% of the purchase
price (upper range of that
percentage tends to be when buying
a lower-priced property, and lower
range percentage if you’re getting a
bigger property).

 When you booked your last
airline tickets, did you go to one
particular airline company’s
website and buy a round-trip ticket
Los Angeles – New York at their
suggested price? No? Why?
 Yet, 77% of borrowers only
applied to ONE lender?!
 It’s no surprise to hear that the
majority of these consumers may
not have received the best
mortgage solution for their
specific circumstance!

 Looking at houses for
sale without knowing how much
you can afford is setting yourself
for failure and disappointment!
 One of the worst feelings for a
seller (and the real estate agent,
for that matter) is when the offer
on the house falls through due to
problems securing the necessary
loan.
Pre-approvals aren’t optional if you
are serious about buying a home!”

 ‘Forgetting’ to disclose? It’s
pretty clear that if a financial
institution were to find out after
submitting the application that you
have (purposely) omitted to come
forward with certain information,
or plainly lied about certain points,
that there’s now a big shadow of
untruthfulness over everything
else you have supposedly fully-
disclosed.
More often than not, your mortgage
application will be declined, and
may potentially jeopardize
future applications as well.

There’s no doubt about it that the mortgage
application process can be a stressful one!
Unfortunately, most people are rather shocked
when they’re first explained how their credit
report reads! Not everybody’s financial health is
as good as they believe it to be!
In the end, if your mortgage application
gets declined, there’s a great chance one or
more of the above mortgage mistakes
were likely the cause!
GET MORE DETAIL BY READING
THE FULL BLOG ARTICLE HERE.

10 Biggest Mortgage Mistakes First-Time Home Buyers Make

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10 Biggest Mortgage Mistakes First-Time Home Buyers Make