11 Deadly mistakes when applying for a mortgage!!

1. Not Knowing How Much Money You Can Put Down

It’s important to know how much you can afford to pay in down payment and closing costs when you apply for your mortgage.  The more you put down the better rates and terms you’re likely to get.  At the same time you also need to stay within your means and comfort level.

2. Working With A Mortgage Broker Who Has A Poor Performance Record

Industry insiders know that the most common reason that a sale fails to go through is that the mortgage fails to go through.  Ask your mortgage broker about her/his performance guarantee. At this time also ask how long he/she has been doing this. I would also ask to see testimonials as to there performance.

3. Not Understanding The Process

Most of us don’t shop for a mortgage very often.  As a result it isn’t something we become familiar with.  Work with a mortgage broker who will take the time to answer your questions and uses terms you understand. Make sure and ask the experience level and do not settle for anyone under ten years!

4. Working With A Lender Who has Only One Investor

Not all lenders have a range of options when it comes to investors.  What if that investor doesn’t offer the type of mortgage you need? Or worse yet, what if you need to change loan products after you’ve started the process?  Working with a mortgage broker who has many investors enables you to address these issues without starting the process over again.

5. Making Large Purchases Prior to Your Mortgage Application

Many people think that it is in their best interest to get large purchases completed prior to applying for their mortgage.  As total debt is a key component in determining the amount of home you qualify for it is best to wait until after your home purchase has closed to make such purchases. This also holds true for refinances. Do not purchase any major items that may increase your debt load while going through a refinance. It may hurt your chances for approval.

6. Over Shopping Your Loan

Each time you call a lender seeking the best possible rate and terms you have your credit report pulled.  Every time your credit report is pulled you risk decreasing your credit score and thus possibly decreasing the likelihood of getting the best rate and terms.  Experts recommend that you select a mortgage broker with a number of investors and do your shopping with her/him. Get with a really good broker and they will do all of the shopping for you.

7. Hiding Things From Your Mortgage Broker

Most of us have experienced times of financial difficulty at some point.  While it can be embarrassing to discuss issues like this, your mortgage broker is there to help you get the loan approved despite such issues.  Your mortgage broker can only help you with those things with which s/he is aware. There is nothing more frustrating then getting a loan turned down when it could have been avoided with the truth!

8. Making Late Payments

Late payments, especially those within the last year, can be very detrimental to getting the best rate, terms and even the difference of being approved at all.  While this might seem like unnecessary advice, ALWAYS pay on time. remember that when you apply that may not be the only time your credit is pulled. Sometimes lenders like to pull your credit for finl approval to make sure everything is still up to date. If you didn't make a mortgage and/or other payents it could affect your approved interest rate.

9. Over Using Credit Cards

Credit cards are a convenient way to make purchases, but if not paid off or balances kept low you might find it more difficult to get the best rates and terms on your mortgage.  Keeping your total debt as low as possible helps you get the mortgage that best meets your specific needs. Also, if you are paying off credit cards in your loan you may not get them totally paid if they are used since the original credit report was pulled.

10. Cosigning On Someone Else’s Loan

While it can be a great service to a friend or loved one, signing to guarantee someone else’s loan is often a big head ache for the cosigner.  Before cosigning you decide if you’re willing and/or able to assume the liability. You should also ask your boker if cosigning will affect your loan approval.

11. Not Getting All The Facts

It is important to learn the total cost of your mortgage loan, both at closing and for the life of the loan.  While mortgages can look a lot alike there can be subtle differences which can save or cost you thousands of dollars.  Get all the facts and know what to expect.