You will be more adept to getting the best deal suited to your mortgage needs. Here are some frequently made mistakes by first time mortgage applicants and how to avoid them:
One of the simplest mistakes you can make is not sorting out your finances first when getting a mortgage. Most people actually start shopping for a mortgage without thinking too much about whether the loan will be approved. Since you are just making comparisons on interests and getting feedback on which is the better deal, you are not too concerned about your existing financial status.
However, before you know it, you have already submitted your documents and end up being rejected by the lender or with a mortgage that doesn’t fit your needs! Before even considering shopping for a mortgage, get all of your finances in order and have all your paperwork checked and ready for submission. Also, get hold of your credit report (this is FREE from Veda) and make sure that all the information on it is correct. If there are mistakes on your credit report it could harm your chances of getting a good mortgage.
Perhaps the excitement of having a dream home drive most people make the mistake of looking at property without having any idea on whether they can secure a mortgage to pay for it. This is when they confuse ‘pre-qualified’ with ‘pre-approved’. Pre-qualification is absolutely an initial estimate of how much one can borrow, and there is no guarantee you will get this amount at the interest rate you desire. Pre-approval means that you go through the credit checking process and the lender agrees in writing to give you a certain amount of money. Getting pre-approval gives you a budget and makes you much more appealing to sellers because you have the financing already in place.
One of the biggest mistakes people make is borrowing too much money. This can come about through a combination of not being honest with yourself and pressure from lenders. You shouldn’t be tempted by lenders who offer you overly generous mortgages because it is you who will pay the price if you cannot keep up with the repayments. Work out how much you can comfortably afford to pay each month and stick to this budget.
With a lot of mortgages you will be offered extra items and pay extra fees that are simply unnecessary. Although they might seem a small amount here and there, they can soon add up and you could end up paying a lot more than you need to. Make sure that your mortgage agreement only includes the items that you need, and investigate the price of any fees you think are too expensive. If a company tries to charge you too much then walk away. Remember, there are always other providers for you. Being careful to avoid common mortgage mistakes pays you with a stress-free financial lifestyle.