Avoid These 4 Mortgage Mistakes (and Save Money)

If you are buying a home, make sure you watch out for these mistakes.

1. Going house hunting before finding a mortgage. You will get a better loan if you have the opportunity to take time to shop for it rather than trying to make an acceptable offer on a home without your financing being in place. Your negotiating will be more successful if you can demonstrate that you are a qualified buyer.

2. Taking the first loan offering because it looks okay. Just because the interest rate is the lowest you have seen, that doesn’t mean it’s the best loan for you. You must make side-by-side comparisons of different loans. Compare interest rates, annual percentage rates (APRs) and loan fees on the “loan estimate” sheets of various loans.

3. Making your loan selection based on marketing promotions. Beware of advertising that says that the lender will be paying for some of your loan fees, such as mortgage insurance or all of your closing costs. You will actually be paying higher interest for the loan to offset what the lender is offering.

4. Not knowing how to read the loan documents. Loan documents have simplified since 2015, making it easier to compare loans. In layman’s terms, the loan estimate will break down the APR, the interest rate, payment, loan terms and cash needed at closing. Just prior to closing, you will receive a similar-looking document, but the line items will be actual amounts, not estimates.

Contact me for an appointment prior to house shopping so we can avoid these mistakes and get you the best loan for your money.