Buying
a home or refinancing one is perhaps the largest financial transaction
you will ever make in your life, so you want to be sure to avoid
any mistakes that may cost you in the long run.
When
you are deciding on a mortgage, you certainly don’t want
to make your decision by flipping a coin.
You
will have to do as much research as you possibly can, so that
you will understand all of the jargon the people in the mortgage
industry will throw at you.
Here
are three common mistakes that people make when deciding on
a mortgage.
1.
Settling for a high interest rate.
When
you are shopping around for a mortgage, one of the most important
factors is the interest rate. The interest rate will ultimately
decide how much money you will be spending at the closing table
and how much you will be spending in charges over the life of
the loan.
The
difference between a percentage and half a percentage could
mean thousands of dollars over the life of the loan.
So
shop around, if you speak with four different loan officers,
I can assure you, you will get four different rates, obviously
you want to go with the one that is the lowest.
Don’t
be afraid to ask questions. Ask how the rate is determined.
Sometimes loan officers can make a little extra commission by
raising the rate a little bit.
2.
Read your good faith estimate
When
you decide on a mortgage and a lender, they will send you disclosure
documents, they are required to send these by law. Inside of
these documents you will find a good faith estimate. This is
an accurate estimate of what you can expect your closing costs
to be when you go to settlement.
Read
every part of this document line for line and word for word.
If there is anything on there that you don’t understand,
call your loan officer and go over it together.
Your
loan officer will most likely want to mail you these documents.
This is fine. However, if you can meet somewhere to go over
it together, than all the better.
But
read your good faith estimate very carefully before you sign
it, this could save you anywhere from a couple of hundred dollars
to a couple of thousand.
3.
Don’t be afraid to shop around
If
at any time a lender or loan officer tells you not to deal with
anyone else because it may be detrimental to the loan or to
your credit, they are lying. If this happens, they are trying
to scare you out of doing business with anyone else.
Feel
free to shop around as much as you would like. Do as much research
as you can before making a decision. So when you finally do
make a decision on a mortgage, you can avoid the pitfalls that
people so often make.
Jay
Conners has more than fifteen years of experience in the banking
and Mortgage Industry, He is the owner of http://www.jconners.com,
a mortgage marketing resource site.
