11 Deadly Mistakes When Applying

For a Mortgage.

Mortgage regulations have changed significantly over the last year making your options much more limited than ever before. Subtle changes in the way you approach mortgage shopping and even small differences in the way you structure your mortgage can cost or save you literally many thousands of dollars and years of expense.

Get the Right Information – Whether you are about to buy your first home, planning to make a move up to your dream home, or re-arranging your debts so you will be debt free many years earlier, it is critical that you be well informed.

Each day people have their mortgage applications turned down because of one or more of these mistakes. By taking the next few minutes to acquaint yourself with the “11 Deadly Mistakes When Applying For A Mortgage” you can save thousands and even tens of thousands of dollars


1. Not Knowing How Much Money You Can Put Down or If or Why You Should.

There are times when it is in fact very important to put down as large a down payment as possible and there are times when in all honesty, it is a waste of time and money. The trick is to know how your choice affects your situation. 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, budget and comfort level. With todays new regulations you may choose to not put in a down payment at all.


2. Working With A Mortgage Broker Who Has A Poor Performance Record. (All brokers are not equal!)

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 his “Performance Guarantee.” You will find that most won’t even know what you are talking about and will come up with all kinds of reasons to show you why they can’t guarantee anything, because they don’t have the confidence in their ability to perform for you.

3. Not Understanding the Process.

Most of us don’t look for a mortgage very often. As a result it simply isn’t something we become familiar with. Further, most if this knowledge is boring and tedious and you don’t really want to understand all the rules and regulations over which you have no control. But it is very important that you understand the basic workings of each loan that is offered as a solution to your needs. Work with a mortgage broker who will take the time to be sure you understand your choices, answers your questions and uses terms and words you understand.

4. Working with A Lender Who has Only One Investor.

Not all lenders have a range of options when it comes to investors (investors are the real source of mortgage money.) In fact most banks, savings and loans and credit unions are all one source (investor) lenders. This simply means they will offer you what they have, good bad or indifferent, and nothing else. What if that investor doesn’t offer the type of mortgage that is best for you? (You will never find out about it.) Or worse yet, what if you need to change loan products and terms after you’ve started the process? Working with a mortgage broker who has many investors enables you to address these issues and make changes without starting the process all over again.

5. Making Large Purchases Prior to Your Mortgage Application.

Now….is NOT the time to run out and buy an entire house full of new furniture and two new cars to put in your new garage. 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.

6. Over Shopping Your Loan.

Each time you call a lender seeking the best possible rate and terms you have your credit report pulled. (If you don’t…..that lender is simply guessing at your qualifications.) 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 large number of investors, many years experience and do your shopping with her/him.

7. Hiding Things From Your Mortgage Broker.

Most of us have experienced times of financial difficulty at some point in our lives. While it can be embarrassing to discuss issues like this, your mortgage broker is there to help you get your loan approved despite these issues. Unlike many lenders, we are on your side. We are not looking for ways to turn you down, we are doing everything within our power to get you approved. These issues will show up sooner or later and the sooner we know about them, the smoother the transaction will be.

8. Making Late Payments

Late payments, especially those within the past 12 months, can be very detrimental to getting the best rate, terms and even make the difference of being approved at all. While this might seem like unnecessary advice, ALWAYS pay on time. Most investors are not judgmental, they recognize that there may have been problems in the past. All they are really interested in is “Are the problems over?” How do they know? The fewer late payments over the past 12 months, the better.

9. Over Use of Credit Cards

Credit cards are a convenient way to make purchases. But if not paid off each month or at the very least balances kept below 50% of your available credit you may find it more difficult to get the best rates and terms on your mortgage.(Your credit scores will suffer) Keeping your total debt as low as possible helps you get the mortgage that best meets your specific needs.

10. Co-Signing On Someone Else’s Loan

This is one of the worst ideas anyone ever came up with. While it looks like it is doing a great favor for a friend or family member, signing to guarantee someone else’s loan is often a big headache for the co-signer. Before co-signing you had better decide if you’re willing to make the payments for that person, because that is exactly what the lender is going to expect you to do.(They are not just asking for you to sign your name to let them know that you think the person you are signing for is a nice person….you are now fully liable for that loan) You have all of the liability with no benefit to you what-so-ever. The mortgage lender will count this co-signed loan as one of your own debts and place the required payment in your debt column. This could easily keep you from getting the mortgage you are looking for.

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 many thousands of dollars. Get all the facts and know what to expect.

I hope this report has helped and I look forward to hearing from you soon. Click here to Contact Us.  Remember, Ultimate Service. Ultimate Results. Period