Before you rush out and get a mortgage, there are some things that you need to be aware of; some mortgage mistakes that most people make. These mistakes can cost you a lot of money and are definitely best avoided. Here are the four most common mortgage mistakes people make.
Everyone loves to shop around and use comparison sites for things like cars and insurance, but less than half of consumers do the same thing when it comes to finding a home loan. They tend to get fixated on the purchase price of their home and the initial interest rate on the mortgage.
There are other factors to consider though, such as the total price of the loan, closing costs, the nature of the loan (fixed/variable), and whether you need private mortgage insurance. Be sure to shop around with different lenders and get a few options before making a final decision. It’s the easiest way to avoid overpaying with a loan and getting more than you bargained for.
It’s important to solve credit problems as soon as possible when buying a home. Don’t leave it until the last minute. Even if you aren’t planning on making a purchase for several months, or maybe even a year, get your hands on your credit report and score now to see where you are.
Borrowers that have better credit scores tend to receive better interest rates. This directly affects how much you’ll be paying each month and how much you can afford. It might take some time to repair your bad credit score too. At least to the point you see a noticeable improvement.
Check for errors on the report that could prevent you from being approved. It’s important your report is up to date and correct. Ways to improve your credit score are to pay off balances to less than 30% of your total credit allowance, avoid using credit for making large purchases, avoid opening new bank accounts and getting new loans, and paying bills on time.
Changing jobs can be a good thing at times, especially if you’re going to get a pay raise from it. Lenders are going to want to talk to the human resources department at your new job or receive a copy of the offer letter to confirm your new status and salary.
If a borrower was to go from a salaried position to being self-employed though, then they are subject to a new set of underwriting guidelines. Lenders will closely assess your employment and income history in order to determine your debt-to-income ratio; the key metric used to evaluate whether you can pay back a mortgage or not.
Self-employed borrowers, and borrowers that rely on commissions and bonuses for income, must be able to provide two years’ of federal tax returns in order to calculate their average income. Starting a company or moving on to a commission-based salary is going to affect your ability to get approved for a loan. Wait until after you have a new home to get a new job.
The mortgage application is the first step being preapproved. Omitting information from the application – especially if done intentionally – is going to sabotage your chances to get approved for a mortgage and purchase a home.
The most common liabilities that people leave off of their applications – whether deliberate or not – are alimony and child support payments. These payments don’t appear in credit reports so it’s up to you to make a lender aware of them.
Also be sure to tell your lender about deferred student loans or if you are on income-driven repayment plans. While you might not be paying much money on your student loan debt right now, lenders are going to want to know that you can still afford mortgage repayments once student loan payments become a factor.
Doing your due diligence and learning about the mortgage process helps you to avoid these common mistakes. Communicating with your lender and doing some preparation allows you to be ready to make an offer when the time comes.
Tiles for walls are more than just practical elements of your home interiors—they are design statements that bring both beauty and functionality to your spaces. Have you ever wondered how a simple change in wall tiles can transform an entire room? With endless options in materials, textures, and designs, tiles can enhance any room, from […]
Creating the perfect wardrobe design for your bedroom interiors can feel like a challenging puzzle. After all, this piece of furniture isn’t just for storing clothes – it’s also a defining feature of your room’s style and a key element of organization. It’s not just a practical necessity; it’s also an essential element that contributes […]
Given a marble’s beauty and timelessness, the variety and types of marble are extensive and boundless in the modern world. Different types exhibit different colors, patterns, and textures based on their origin. That being said, selecting the right type and variety that suits your space is crucial to justify the beauty of marble. Regardless of […]
Marble bathroom designs transform your bathroom interiors to a great extent, considering marble’s purity, shine, and grace. With bold veining, rich texture, and different colorations, marble can transform an ordinary bathroom into a different level of refined relaxation. From sleek, minimalistic designs to strong statement pieces, marble suits your styles, rendered to be equally complimentary […]
When you walk into a room, what’s the first thing you notice in the interiors? The furniture, the walls, or the ceiling? Often overlooked, the ceiling plays a significant role in defining the ambiance of a room. If you’re looking to add some flair, sophistication, or a modern touch to your living room, false ceiling […]
As soon as you enter a space, walls define its boundary, volume, style, and experience. Interior wall designs are crucial in determining the mood and aesthetic appeal of an interior space. To create a one-of-a-kind space for occupants and guests, the interplay of interior wall designs and their volume is key. To evoke a feeling […]
In small bathroom layouts, every square inch counts. Without a thoughtful plan, a small space can quickly become cluttered, making it feel even more cramped. The right bathroom layout not only enhances functionality in interiors but also creates a sense of openness. Think about it—how frustrating is it to move around a bathroom where the […]
Do you enjoy keeping games, books, and ornaments in your hallway? This carefully chosen collection of living room storage ideas will complement your interior decor and be suitable for Indian homes. These are chosen from a shortlist of different product designers’ living room storage designs on Archioo. The following living room storage concepts have been […]
Creating a TV unit design in bedroom requires the right balance of functionality, optimization, and aesthetics to enhance the space. Apart from cots and wardrobes, TV units in a bedroom play a pivotal role in captivating an individual’s attention. Keeping in mind, the design theme and concept of your home, the TV unit design in […]
Are you worried about the small space left in your kitchen? In parallel kitchen design, the layout divides the kitchen into two parallel counters. Including the parallel kitchen design, the work sequence includes store, wash, prepare, cook, serve, eat, and be followed by clear and wash up. From the sequences, we learn that three appliances […]