Most of the home owners buy their dream houses with mortgage loans, and many make mistakes doing so. Yet, this topic is less discussed, and people know very little about these mistakes. In this article, I’ll talk about the common real estate mortgage mistakes that you can avoid very easily.
Top 4 Real Estate Mortgage Mistakes
1. Job Instability
When you’re applying for a mortgage loan, job stability is important. If you have a history of changing jobs frequently, chances are you’ll face a hard time getting the mortgage loan unless you change your job in a similar field. Also, if you have a bad job record, there’s a high chance that your mortgage application will be rejected. Lenders or banks don’t want to give their money to someone who isn’t stable in their job.
So, if you’re planning to get a mortgage loan from banks or lenders, try not to quit your current job as it’ll be easier for you to get a mortgage loan from the bank.
2. Not Paying Attention to the Fees Associated with the Mortgage
It’s a common mistake to not pay attention to the fees associated with the mortgage loan and the mortgage loan process. This fee varies from company to company. So before taking the mortgage loan from the lender, you should ask about the additional fees associated with the mortgage loan and process. You should write down all of the figures/terms to compare the companies.
3. Neglecting the Total Cost of a Real Estate Property
Buying a house isn’t easy, and there’re several hidden costs with it. Many people make this mistake of thinking that they’ll have to pay only the mortgage fees every month, and after a certain time, they’ll become the home owner. But this isn’t absolutely true. When you buy a house, you’ll have to spend a good amount of money on other things such as; repairs, maintenance, utility, etc. Most of the lenders or banks won’t tell you about these hidden costs, and you’ll have to calculate it by yourself. If you neglect these hidden costs, you’ll be in a vulnerable position after buying the house, especially if you’re planning to buy the house with brim-filled budget.
4. Skipping the Mortgage Lock
This is another common mistake made by the buyers when they don’t lock their mortgage rate. It’s an agreement signed by both the lender and the borrower that the mortgage rate will be the same for a certain time. For example, if you take mortgage loan on 5% interest and after a certain time, the rate may group to 6%. But you won’t have to pay the extra 1% interest rate if you’ve locked the mortgage rate. However, if you didn’t lock the mortgage rate, you’ll have to pay the extra 1% or whatever the increment is. Also, if your rate lock date is expiring, you can extend the time period. For this, you’ll have to pay some extra fees to extend the rate lock time period. This extension fee varies from lender to lender.
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