It’s an exciting moment in anyone’s life when they finally qualify for a mortgage. A mortgage is a way to finally live in a house you can call your own — well, at least in a matter of time.
There are mistakes you can make while shopping for a mortgage, and even when you’ve qualified with a mortgage company in Salt Lake City, though. As long as you don’t make these mistakes, however, you’ll be on your way to an enjoyable time living in your own home.
Mistake #1: Getting the First Loan You Find
Before signing the papers on a mortgage, be sure to look around for the best one. It’s the same as looking for the best holiday deals, from the plane ticket prices to the accommodations; or shopping for groceries, from the cost to the calories. You have to look for a loan that fits your budget. Don’t get too excited or distracted by the actual house-shopping. Look for a good deal!
Mistake #2: Not Considering the Cost to Own
You don’t just spend money on the down payment and the monthly amortization. You also have to spend more on maintenance, insurance (especially if the area is flood-prone), property taxes, etc. Don’t ignore APR, either. The Annual Percentage Rate shows the percentage rate and other charges. Remember, you will be paying for the house over some years. Not computing the APR might end up costing you more than you expected at the time you signed up for a “low interest” loan.
Mistake #3: Not Putting a Down Payment
Not putting a down payment, or putting a tiny one, is a sure way to pay much, much more for your loan’s interest and mortgage insurance, which is your lender’s protection, not yours. In case your home is foreclosed because you couldn’t pay, the mortgage insurance will cover some of the lender’s losses. Paying a down payment means you can avoid bigger monthly payments.
Mistake #4: Not Making Sure Your Credit is Healthy
Before you do anything, check if your credit is good by getting a report from one of the major credit bureaus. A good credit puts you in a position to get the best loans. If you find out that your credit needs some work, at least you can delay the loan application until your credit has recovered. One more thing: credit reports are not immune to mistakes, and checking gives you the chance to correct those mistakes first.
By avoiding these common mistakes, you can enjoy the home buying process without any hesitation.