Common Mistakes People Make When Shopping For A Mortgage
For most people, the dream of homeownership becomes a reality with the help of a mortgage. More often than not, the procedure of obtaining a mortgage is lined with intricacies. Not only is it a time-consuming affair, but the several steps involved in the process can make acquiring a mortgage a daunting task. With so many mortgage options available in the market, many face the dilemma of picking the most suitable deal.
Overwhelmed and confused over how to go about shopping for a mortgage, many clients tend to make mistakes that they live to regret. If you’re planning on purchasing a house with the help of a mortgage, it’s important that you take time to research. Thorough research will help you steer clear of mistakes that might otherwise cost you a hefty sum. To help avoid errors and make the process of shopping for a mortgage easier, here’s a list of common mistakes people make while obtaining a mortgage and how to avoid them.
1. Racking up too much debt
Buying a house is a time-consuming process, and you may find yourself facing other expenses for which you might need to borrow money from the bank. However, this will only add on to your debts and impair your debt utilization ratio. Higher debt levels can adversely impact affordability for your home purchase, and this could sabotage your chances of obtaining a mortgage. The only way to combat debt is to pay it off. To keep away from this widespread mistake, ensure that you don’t rack up too much debt before getting your mortgage finalized.
2. Not disclosing all the details
We’ve come across many clients who hold back crucial information, which leads to a disintegrated mortgage application. For the mortgage broker to suggest a suitable deal at reasonable rates, you should disclose precise financial details. Giving selective or inaccurate information, intentionally or inadvertently, can negatively affect your mortgage application. It’s important to acquaint your mortgage professional with all your liabilities and income-driven repayment plans. By appraising your income amounts and debt payments, they will be able to give you the best mortgage deals. For your mortgage application to be complete, you need to be specific when providing information and back it up with authentic documentation.
3. Not taking care of their credit
Credit history and scores have a colossal impact on the buyer’s ability to procure a mortgage and also in deciding the mortgage rate. Disregarding credit history and scores is another common mortgage mistake that’s made when buying a home. Clients need to have a credit score of 640 or higher to qualify for some of the best rates. Abusing their credit with overutilization or high utilization, missed payments, collections, multiple credit checks, etc. hurt the client’s credit. If possible, check your credit records well in advance so that you have plenty of time to fix the errors and boost your credit scores and records.
4. Not supplying paperwork in time
The mortgage application procedure can be complex. Your mortgage broker will need you to submit a number of documents – before and during the process. To avoid unnecessary delays, provide the documents promptly when your agent asks for them. Ensure that documents like bank statements, income and asset documentation, etc. are valid and updated.
5. Making firm offers without consulting their mortgage broker.
Another mistake that often occurs is clients putting in firm offers or offers with no conditions without consulting the mortgage professional first. This may result in a lost deposit and legal repercussions. An experienced mortgage broker, who is well-versed with the mortgage rules and regulations, will be able to check the agreement meticulously for errors and potential frauds. Before closing in on a firm deal, consult your mortgage broker.
To avoid these and many other mistakes when purchasing a mortgage, reach out to Spencer Murray Mortgages. As a broker in London, ON, I help simplify the process of shopping for a mortgage, making the procedure of home-buying an exciting endeavor. I strive to give an individualized experience by assessing every client’s financial situation and needs carefully. I am determined to give my clients access to many lenders and a wide range of products so they can pick the best option. To learn more about the services we offer, please click here. If you have any questions about mortgage, please get in touch with us by clicking here.