Big Mortgage Loan Mistakes: Knowing What NOT to Do

Big Mortgage Loan Mistakes: Knowing What NOT to Do

The pitfalls of the application process for a mortgage are myriad and most people aren’t adequately informed as to the necessary steps that it takes for preparing themselves for the financial burden of owning a home. Too often people are under a common misconception that all one needs is a loan from a bank to make the purchase. There are, in fact, many additional needs and fees that the average consumer will need to prepare for before embarking on the stressful process of applying for a home loan. After all, buying a home is potentially the biggest piece of debt most people will take on in their lifetimes and here are a few tips on what NOT to do.

  • Understand the Size of Your Mortgage

  • Know Your Rates

  • Watch Out For Closing Costs

Understand the Size of Your Mortgage

On average, a mortgage is around two to three times a person’s annual income. This figure takes into account the estimated 40 to 50 thousand dollars a year income that makes up the mean average in the US. It’s important to note that, give this expense, people would be remiss to not try and save as much as the possibly can. Unbeknownst to many people, there are many first-time homebuyer programs that are specifically designed to alleviate a lot of these burdensome costs. Most are sponsored locally, citywide, statewide, or in some cases include the whole country. These are desired programs because the government usually offers better terms and rates of interest typically found in the private sector. These types of programs are particularly attractive to those individuals with a poor history of credit.

Know Your Rates

All rates are not created equal. It’s stressful buying a home and some consumers don’t do the necessary legwork when shopping around for terms and conditions. offers a step-by-step guide to finding the best rates for your home loan.

Watch Out for Closing Costs

Though it isn’t the only cost you’ll have in your purchase, the interest will be the most expensive part of the process and it should be treated with the kind of care it deserves. The cost difference could be into the thousands and possibly even the tens of thousands. Unfortunately when many begin the process of a mortgage application, they don’t realize that closing costs are a huge part of the buying process. You must have extra money set aside for closing costs! Chances are, there’s always going to be something that pops up during the process that will cost extra money and planning ahead and having a little extra cash on hand will make this process all the more simple. Most closing costs can range into several thousand dollars and the current homeowner isn’t always willing to pay the closing costs for the buyer. Even if they are open enough to do so, then you’ll still want to keep a few thousand on hand for any remodeling touches you’ll want to make later on.

Find A Professional

The process of buying a home is tough enough so it’s important to make it as easy on you as possible. These are some situations that are big industry pitfalls that average consumers should do their best to avoid. Follow some of these tips and do some online research in order to glean other bits of advice that will help smooth the process out for you. There are tons of industry professionals that can offer quality advice on the entire process. They can give you great fsbo leads or good lender rates. You want to get the help that will save you the most while getting you the most. It’s always good to prepare for the worst and hope for the best.

This site is for informational purposes only. It is not sponsored or in any way affiliated with the government. If you are in need of a mortgage loan, consult with a licensed mortgage professional. All fair housing and equal housing opportunity laws apply when applying for a mortgage or buying a home. Copyright 2012.