1.
Being Uneducated About The Mortgage Process
Since buying
a home will most likely be the largest single purchase you will
ever make, it’s important you understand the actual process
of a mortgage to insure you capitalize on your investment. Utilize
my reports to educate yourself…it will save you from running
in to major problems and allow you to turn your home (debt) into
a profitable investment. Also, seek out a lender you feel comfortable
will be patient, professional and honest.
2.
Dealing
With A Second-Rate Mortgage Company.
As a mortgage
Analyst, I can’t stress how important it is to research
your mortgage company before dealing with them. Don’t be
afraid to ask any questions you feel necessary. Be sure and ask
for references. Make sure they have satisfied customers. Be sure
to ask what percentage of their mortgage applications are denied.
If more than 10% of their loans are never funded, look elsewhere.
Ask what their average turn around time for processing a loan
is. Most modern mortgage companies should be able to approve your
loan within hours or even minutes. They should be able to fund
your loan within 7-10 business days. In this day and age, there’s
no reason to put up with a second-rate mortgage company.
3.
Dealing With A Lender Who Funds Their Loans Through Only One Investor
In
the mortgage world loans are called products. As you probably
know, there are many different types of loans to suit different
types of situations. Some people require a 30-year mortgage while
some would rather have a 15-year term. These are just two of the
most common loan types. There are so many different types of loans
(products) it would be impossible to list them all. To see a comprehensive
list of loans and their description, please refer to section 1
& 2 of the bonus section in my report. Since not all lenders
have a wide range of products, make sure to ask for a list of
loans or products a lender has and have him or her sit down and
explain the pros and cons of each one that would be of interest
to you. Choosing a lender with the widest selection of products
will insure you get the best loan possible.
4.
Being Misinformed about Your Down Payment
Since the amount
of money you place on a down payment will directly affect your
monthly payment, your mortgage term and your interest rate, it’s
very important to take the time and understand your options. It
used to be typical that a person places 10% down, however now
days there are many different programs available for different
situations. There are now programs that allow you to put below
10% down or even 0 down. Just remember that the less you put down,
the longer your mortgage term will be in addition to a higher
monthly payment and or a higher interest rate. However, you want
to make sure you don’t put yourself in a bind trying to
make a down payment that is larger than you can afford.
5. Making Large Credit Purchases Prior
to Applying For Your Mortgage
Since the amount
of debt you have is calculated in determining how much of a home
you qualify for, be sure not to make any large credit purchases
before applying for a mortgage.
6. Over Shopping Your Loan
Over Shopping
is when you contact multiply mortgage companies for a quote. In
order for a mortgage company to give you an accurate quote, it’s
necessary for them to pull your credit report. If your credit
report is pulled more than 2-3 times in a six-month period, you
risk decreasing your credit score. Which in turn could keep you
from obtaining the best possible rate and loan term. This is why
I recommend researching mortgage companies before hand. Finding
a mortgage company with a large selection of products will decrease
the need to over shop.
7. Keeping Personal Information From Your
Mortgage Broker
This is often
one of the most frequent problems mortgage brokers run into when
dealing with a client. Your entire financial history within 3
years prior to applying for a mortgage may be used as a reference
to calculate how much of a mortgage you can afford. It’s
crucial you are honest and up front about all this information
with your broker, even if you have had some problems dealing with
financial difficulties in the past. You may find it difficult
to discuss issues such as this, however it’s best to present
and explain these matters in the beginning. Trying to hide past
financial difficulties will only slow the loan process. Your mortgage
broker is used to dealing with these issues, it’s important
to work together to overcome negative financial history.
8. Not Using Common Sense
Most people
will already know it’s important all credit card balances
should have very low balances or none at all before applying for
a mortgage. It won’t allow you to obtain the very best rate
and terms if you have racked up balances on your credit cards.
Also it’s important you have a good history of paying your
bill on time (especially within the last year). I may be a bit
redundant in mentioning these things…however, these issues
are super important factors in obtaining the best loan possible.
Note: I don’t want the above considerations
to scare you from going out and applying for a mortgage. Just
arm yourself with the best knowledge available and understand
the factors above are important to getting the best possible interest
rate, monthly payment, and term.
