Common Mistakes People Make When Getting a Mortgage
Purchasing a home can create a lifetime of happy memories for home seekers and their families. However, in the excitement to secure the keys to a dream home, crucial steps can get overlooked in the mortgage process, which can have long term ramifications.
If mistakes get made in the paperwork, you could face substantial financial losses and even have to sell your home due to not grasping the terms and conditions.
So, to help you avoid some basic errors that could prove costly, Jay Meakin- Archimedes Mortgage LTD has put together a list of the most common mistakes people make when getting a mortgage.
1. Buying a home before getting pre-approved
It usually happens when a realtor does not direct clients to get pre-qualified by a mortgage broker. Completing a pre-approval gives home seekers a good indicator if they can secure a mortgage, based on their financial situation, so don’t skip it.
2. Customers try to quarterback their own deal
They already have a preconceived idea of structuring the purchase financing, but it may not be the correct solution, and they could get stuck with massive debt. That is why it is best to always use an experienced mortgage broker.
3. Being sloppy with credit repayment
Customers often ignore the cell phone company’s requests for payment when switching providers, which is a mistake as the cell phone companies will send the unpaid bill to a collection agency. It leaves a black mark on your credit bureau that takes six years to come off once it’s paid, and even if it’s paid right away, it will not get removed.
4. They don’t keep money set aside for closing costs
Many lenders require 1%-1.5% of the purchase price set aside for closing costs, including lawyer fees, title insurance, and property tax adjustments. However, many home seekers fail to factor in these costs and have to borrow from elsewhere.
5. Finance or lease an automobile before purchasing a home
A $500/month car payment represents a loss of about $100,000 of buying power, so if you plan to buy a home, don’t go out and purchase a flashy new vehicle
6. Switch jobs just before making a home purchase
Going self-employed or switching jobs is a part of life. However, if you’re planning on buying a home, it will delay your purchase and could add another couple of years to the process.
To avoid these and other mistakes, reach out to the experts at Jay Meakin- Archimedes Mortgage LTD. As an experienced mortgage broker in Calgary, AB, I render customized services.
My services include credit cards, New to Canada mortgages, and first time home buyer mortgages. I also provide reverse mortgages for clients.
I serve clients across Calgary, Crossfield, Airdrie, Cochrane, Strathmore, Carseland, Okotoks, Black Diamond, High River, Blackie, Dead Man’s Man’s Flats, and Canmore, Alberta