Common Mistakes to Avoid When Getting a Mortgage

Dan Balch |

Common Mistakes to Avoid When Getting a Mortgage

If you are planning to buy a home, then you’re about to make the biggest financial transaction of your life. If you are unable to pay for your home by cash, then you'll need a mortgage to make your homeownership dreams a reality. However, the process of obtaining a mortgage can be cumbersome and requires a lot of research.

Caught up in the excitement of being homeowners, people commit several errors when obtaining a mortgage that costs them in the long run. When buying a home, I believe it's extremely important that buyers are aware of common mortgage mistakes made so they can avoid them at all costs.

To help create awareness and ensure your mortgage process is a smooth one, I’ve compiled a list of the most common mistakes people make when obtaining a mortgage.

1. Not knowing your options. When you go to the bank they give you the mortgage they want you to have. It may be more in their best interest than yours. This could cost you thousands of dollars in interest. This is why you should know all your available options so that you pick one that best suits your requirements.

2. Getting a collateral mortgage and not a standard mortgage. Most people have no idea what kind of mortgage is available. The bank puts them into collateral mortgages which really connects them to the bank and reduces their options in the future. It is important to ensure you understand the product you are getting.

3. They go bi-weekly not accelerated bi-weekly. Most people understand if they go bi-weekly with their payments the mortgage is paid off. This only works if you ask for bi-weekly accelerated and not just bi-weekly. Not doing this could cost you over ten thousand dollars in the first five years alone.

4. Not shopping around for a better rate. Most people are content to receive an interest rate that their bank gives them. Shop around as you could get a better rate and save thousands and receive better options like increased prepayment privileges.

5. Not having someone look at the bigger picture. The bank is transactional, they look at your mortgage as a transaction alone. You have to look at your whole financial picture when you are applying for a mortgage. For example, putting less money down and using the extra money to pay off debt or investing in your future.

6. Using the internet to make your decisions. There is so much information on the web. While there is a lot of good information, there are a lot of pointers that do not pertain to your situation. Find a broker that is a true professional that can sort through all information that pertains to you and can give you informed answers to your questions and more.

To rule out these and other costly mistakes, reach out to Dan Balch. Besides being an experienced mortgage broker, I also have experience in other fields such as real estate, financial planning, and insurance. To learn more about services that I provide, please click here. If you have any questions about obtaining a mortgage, get in touch with me by clicking here.