When you take out a mortgage, you are committing to pay a lender thousands of dollars over the life of the loan. Because of this, it is important that you take care to avoid agreeing to terms that could hurt you later on. Here are seven of the top mortgage-shopping mistakes to avoid.
1. Trying to Get Other Credit
When you are trying to get a mortgage, you need to make sure that your credit is in tip top shape. This means that you do not need to apply for other types of credit at the same time. For example, if you are trying to buy furniture, to open a store account. This could hurt your credit a bit, and negatively affect the rate that you are able to get for your mortgage.
2. Not Being Aware of Your Credit
Another common mistake that people make when they are shopping for a mortgage is not checking out their credit first. Before you go into a mortgage company in NJ and apply, you need to see what your credit looks like. There are all kinds of things that you could do to improve your credit in some cases. If you don’t do these first, it could cost you.
3. Picking the First Lender
Many people choose a lender to go with after talking with only one. If you really want to get the best deal, it’s important to look at several lenders. For example, instead of just going with the lender that is recommended by one of the best Bergen County contracting professionals, talk to that lender and look at others.
4. Ignoring the Chance to Pre-Approve
Before you start shopping for a house, you should also consider getting pre-approved for a mortgage. By getting pre-approved, you can find out how big of a mortgage you can qualify for. This will help you in choosing the right house, so that you’re not disappointed later.
5. Agreeing to Something You Don’t Understand
During the process of applying for a mortgage, it is not uncommon to run across terms or conditions that you do not understand. You should not sign anything that you don’t fully understand. Even if you are worried about looking stupid, you shouldn’t sign anything that doesn’t make sense.
6. Taking On Too Much Debt
Just because the bank says you can qualify for something, that doesn’t mean that you should take out the loan. Only take what you think you can really afford.
7. Waiting for the Right Time
Trying to time the market is futile. There’s no way you can predict what market rates will do. Just get a mortgage when you need one.
If you can avoid these mistakes, you’ll have a much better time when shopping for a loan in the future.
Image Credit: 401(K) 2013