If you are in the market for a new mortgage there are things you need to know before shopping for a lender. Mistakes made when applying for a mortgage can result in having to pay a higher interest rate, fees, or even having your application denied.
Credit Mistakes to Avoid
The biggest mistake you can make regarding your credit is misrepresenting your income and credit to a lender. You should be asking for no-obligation quotes when shopping for a mortgage to protect your credit from too many lender inquiries; if you misrepresent yourself you could lose the loan when the lender actually pulls your credit.
Bad Credit Mistakes
Having bad credit is punishment enough for any financial mistakes people make. It's worse when lenders take advantage of your circumstances with outrageous fees, conditions, and interest rates. Don't let a lender take advantage of you just because you have a poor credit rating. There are mortgage lenders genuinely concerned with helping people; you just have to find them.
Pushy Mortgage Brokers and Lenders
If you come in contact with mortgage brokers or lenders that seem like they are using pressure sales tactics, look elsewhere. The same is true of lenders or brokers that seem too eager or promise too much. If you let a broker push you into a loan that is not right for you it could cost you thousands of dollars. You may find yourself with unfavorable terms or a large balloon payment you have no way of making. If your lender or broker is promising you the moon and it seems too good to be true, run.
Do Your Homework and Shop Around
The best way to avoid mistakes with your mortgage is to do research. Research lenders, brokers, and their mortgage offers. Compare fees, conditions, and interest rates. Not all mortgage lenders are unscrupulous. This does not mean you neglect to do your homework and keep your guard up.
Unscrupulous mortgage brokers prey on homeowners that are not familiar with the mortgage process. The only way to avoid mortgage pitfalls is to educate your self.
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