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.
Luxury used to be all about flashing big logos and bold statements. But lately, the game’s changed. Quiet luxury is all about subtlety: investing in quality, craftsmanship, and classic pieces that don’t cry out for attention but quietly elevate your space. It’s that feeling you get walking into a room where everything just feels right, without needing […]
Imagine a home that breathes with the breeze, where sunlight filters through lush foliage, and the vibrant hues of nature are an extension of your living space. Tropical houses are architectural marvels; a profound dialogue between human habitation and the natural world, born from centuries of adapting to warm, humid climates. Far from rigid structures, […]
Buying a mini excavator isn’t something you do on a whim. Whether you’re expanding your fleet or picking up your first machine, you need to know it’s the right fit, not just for today’s jobs, but for what you’ll be tackling a year or two down the line. These machines might be smaller than full-size […]
“Dream kitchens don’t just happen — they’re designed with care and style.” Walking into the same old and outdated kitchen in your home? It’s time to change the design and get that wow factor, according to your needs and wise design choices. Seems like a challenging task, right? But let’s be clear here, the kitchen […]
Kerala style homes have courtyards surrounded by rooms on each side. Traditional Kerala-style homes have a central courtyard known as Nadumuttam surrounded by rooms. These homes promote natural light and ventilation according to the region’s climate. These homes, due to the feature of courtyards as their core spaces, offer beautiful opportunities for social gatherings. This […]
When it comes to enhancing the kitchen window over the sink, various design ideas are possible to decorate Indian homes. From rooted in tradition to Western-style modular kitchens offer both functionality and attractive aesthetics. Apart from the sleek profile and raised breakfast counter, the kitchen window over sink is another spot to add appeal and […]
Indian homes place equal importance on pooja room door designs as they do on main door designs. With diverse and unique ethnic backgrounds, every family strives to reflect their personalities and identities in their designs. These identities can encompass religious or spiritual interests, local contexts, or other personal elements. This series of blogs, featuring 50 […]
The door design for main door is a defining feature of any Indian home, embodying both style and cultural significance. In a country rich with diverse architectural traditions, the entrance to your home reflects not only personal taste but also cultural heritage. Whether you’re drawn to the intricate carvings of traditional Indian door designs or […]
Pillar design is a cornerstone of architectural elegance, seamlessly blending structural support with aesthetic appeal. Our blog, “50 Best Pillar Design Inspirations,” celebrates this essential element, showcasing a variety of styles from classical Doric and Ionic to contemporary and avant-garde innovations. Whether you’re an architect, interior designer, or a design enthusiast, these pillar design inspirations […]
The integration of screening evergreen trees serves as an artful blend of practicality and natural beauty. These screening evergreen trees, with their lush foliage and diverse benefits, play a crucial role in enhancing privacy. It also blocks unwanted views, and contributes to the overall well-being of homeowners. From the majestic Jamun trees to the versatile […]