Save yourself money, time, energy and just a whole lot of problems by following these 5 tips as what not to do when you apply for your mortgage.
Some people make mistakes regarding their mortgages, so it is in your best interest to get educated and understand your role when applying for a mortgage. Some of the following tips may seem like common sense, but you would be surprised by how many people will just rush into a contract, not really paying attention to the details.
A person may rush because they need to move quickly, there could be problems associated with the move, or simply they want the house or property so badly, they have the I'll do anything mentality and take the first contract they can.
Let me be clear, no matter the situation you are in, if you are in trouble, have other outside forces dictating the purchase of the property or just plain eager, buying a home is something you do not rush into. This is one of the most important complex financial decisions a person will make in his or her lifetime. It is ideal to plan on purchasing property when you have ample time to search, shop, and find financing.
1. Lie about your financial information
No matter how tempting it is to add just a little more to your income, or subtract a little from your expenses, don't do it to get a better mortgage rate! Not only is it against the law, but the income to debt ratio that is taken from your annual income, expenses, and other debt is for your benefit to see how much you can really afford every month for a house payment.
If you lie about these numbers, you could end up outside of your financial range and not being able to pay your mortgage, go into default and have many problems involving foreclosure and problems with the lender. It is just not worth it.
2. Sign blank documents
This may seem simple, but don't ever sign any blank documents or documents you do not understand or appear to have a clear and necessary purpose. Although many brokers and agents are honest, you do not want to be in a situation where you mistakenly signed a document that you did not agree with, or had information that you did not understand, or they later added text to the document where you had already signed. Weirder things have been done to dupe a client into terms that he or she are not privy to.
3. Work with the first lender you meet
Always shop around! There are too many options in the financial lending world to take the lender your broker suggests or the first one that appears to be good. It is best to shop a few lenders, terms, types of mortgages and rates to see not only which one can offer you the best deal, but also which is the best deal for your specific situation. Use both offline and online services to determine the best lender to work with.
4. Not negotiating
The beauty about mortgages, they are not set in stone and terms can be negotiated! If you are not pleased with the deal, then ask to change it or ask for different terms. You can negotiate the rate, points, life of the loan, and even fees. The better credit history and financial situation you are in, the more negotiating power you will have. It may even be in your best interest to wait until your financial situation is a little better in order to get a better deal.
5. Don't get forced into a deal
Always make sure you are the one who is fully open to the agreement made between you and the lender or broker. Never be pushed into or forced into a deal that you are not completely sure about. The decision should be entirely yours after assessing your research. Don't listen to lender sweet talk like, You are not going to find a better deal anywhere else and This is the mortgage you need to have.
If you feel that you are being pressured into a deal then just go to another lender. The financial lending world is very competitive and you can bet someone will treat you better or offer you better terms just to get your business. You are the client so get what you want on your own time. You have full control of these situations and don't let someone tell you differently.
John R Blakefield is a mortgage and real estate specialist. For more information, articles, news, tools and valuable resources on home mortgages or investment loans, refinancing, debt solutions, visit this site: http://www.scourtheweb.com/mortgage/.
