Are you applying for a mortgage on your home? Keep in mind that a mortgage is a major financial decision and choosing one will have a significant impact on the rest of your life. Many people go into this decision without understanding all of the essential mortgage information they need to know, which means that they are likely to make poor choices that will result in paying much more than they need to.
If you want to save yourself from throwing away your hard earned money, here are a few common mistakes to avoid:
Trying to Bottom Out the Market
Many people will wait too long to make a decision to lock in their mortgage rate, trying to wait until they think that the rates have hit bottom. However, unfortunately most of the time this leads them to wait too long and end up with a higher interest rate. If you are waiting things out, keep a very close eye on the economic indicators. Your daily newspaper will be a good source of information about the fluctuations of interest rates.
Forgetting About Closing Costs
In addition to saving up a down payment for your mortgage, don’t forget to factor in the closing costs. These can range from two percent all the way up to six percent of the value of your home. Make sure that you have budgeted for this in advance, so that these fees don’t catch you by surprise.
Not Considering All Loan Options
There are many people out there who haven’t considered certain loan products, such as an adjustable rate mortgage, because they just don’t understand how they work. However, if you do this you might be missing out on an option that would really work well for you. Make sure you do your research and gain an understanding of the loan options available to you.
Looking at Just the Mortgage Rate
Remember that the mortgage interest rate is only one factor that you should consider when choosing a mortgage. Don’t forget to also consider the time frame of the mortgage, the restrictions on lump sum payments and any other important factors.
These are just a few of the common mistakes people make when choosing a mortgage, so make sure to avoid falling into these traps yourself. For more information about home buying and mortgages, please contact me so that I can assist you.