FIRST MISTAKE: You shop around too much for a loan.
Your credit score is based on how risky it is for someone to lend you money. Over time, the credit reporting agencies have found that borrowers who try to get loans from a lot of different places are riskier than others. So, every time a lender checks your credit report, your credit score goes down.
When you call a lender to find the best rate and terms for your home mortgage, he has to pull your credit report. This is part of your credit score, and if it's low, it makes it less likely that you'll get the best rate and terms.
Some people only care about rates, but you should talk to a member of the National Association of Responsible Loan Officers who is willing to talk to you about your loan options. There are hundreds of different loan options, and each borrower has a different financial situation and goal. We strongly suggest meeting with your loan officer so that he or she can make a programme that fits your needs instead of just focusing on rates and points. You might find something better than what you were looking for.
The second mistake is trying to hide past money problems.
One of the most important things a responsible loan officer can do for you is help you get over past financial problems that might make it hard for your loan to be approved. The person giving you a loan is on your side.
Give the loan officer the information that will help them give you the best rate and terms possible and make your credit history matter less. You are a better risk than people who have never had money problems because you were able to solve them in the past. Getting through financial trouble shows that you keep your promises and don't give up.
Mistake #3: Letting a loan officer put false or misleading information on your loan application about your income, expenses, or cash available for down payments.
Fraud is giving false information on a loan application. Federal authorities go after people who cheat on their mortgages, and they will find out about the fake information. Do not help a loan officer who is trying to get a loan by lying on the application.
Even if a loan officer fills in the information for you, you shouldn't sign the loan application until the loan officer fixes it. This is true even if the loan officer fills in the information for you. Many loan officers try to "help" borrowers by lying about the facts, but in reality, they are just getting themselves and their borrowers into a lot of trouble.
MISTAKE #4: Taking out more money than you can pay back.
We all know that we might have to spend a little more each month to buy the homes we want. But you will put your whole financial health at risk if you buy a house you can't pay for.
If you buy an expensive home but can't make the monthly payments, you could lose a lot of money if you have to sell it quickly to pay off your mortgage. Or, even worse, you could be forced to go bankrupt or lose your home.
It is much better to be patient, buy a home you can comfortably afford, make payments, build equity, and then move into a bigger home after a couple of years. Yes, the bigger house will cost more, but the value of the one you bought will have gone up in that time. Most importantly, you will have built a strong financial base that will let you live all of your dreams, including buying your dream home.
#5: Relying on advertising for interest rates.
Some loan officers try to get your attention by talking about interest rates, but they may end up costing you more. Most of the time, these rates are based on a 30-year mortgage and an accelerated payment plan.
You might choose that option, but you can't directly compare the interest rate on that mortgage to other options. This loan could cost more than mortgages with interest rates that seem to be higher.
It's important to find a loan officer you can trust to go over your options and find the best rates for your financial situation. A responsible loan officer is the only one who can explain all of your options in a way that you can understand.
