Borrowing your home might mean taking thousands of dollars in debt, which further may take over years for you to repay. Either you will make a smart choice in terms of mortgage rates or you will end up creating a disaster that can give rise to various obstacles in accomplishing your financial goals.
That’s why it is extremely pivotal for you to avoid the biggest mortgage mistakes. When you will be able to do so, you will start making wise and smart financial decisions while carrying out the buying process. This will help you out a lot in creating long-term financial security and in placing you on the safer side.
So, let’s know the top 5 mistakes you need to avoid while selecting the best refinance rates for you!
- Not Checking Your Credit Score Before Applying For Loan
Believe it or not, but your credit score plays a vital role in affecting the mortgage rates that you will pay over a specific period of time. According to myFico, you will be able to have the mortgage cost at 4.401% if you have a credit score between 680 and 850. Now if you have a loan of, let’s say $300,000, then this mortgage will easily grab you with a monthly payment of $1,502. Besides, your total interest will cost you $240,886. You can easily figure out what will happen if your credit score will fall down by 100 points. It will certainly lower your monthly payment and increase your interest rates.
Therefore, it is advisable to check your credit score before applying for the loan because if your score becomes low, you can take some effort to raise it for extensive positive results.
- Placing Your Property On The List Before Refinancing
If you are thinking to list your property on the MLS (Multiple Listing Service) and then refinance on that same property either within 6 months or longer, then immediately say it a big no-no. Who would like to give you a loan on something that you really do not want to have? Who would like to give you a loan on something that you have already tried to get rid of before? Think about it before choosing the right mortgage rates!
- Not Checking Your Affordability
Before searching for homes or any other property, you should get yourself prequalified and pre-approved. This is another method to grab the best mortgage rates. If you are not checking your affordability on the basis of your salary and assets, then you are certainly committing the biggest mistake.
- Spending Too Much/Opening New Credit Cards
If you have an existing amount due on your credit card or you are choosing to make a new credit card during the whole process of the loan application, then you might welcome some unexpected financial crises. You may eventually increase your debt load, which will certainly lead to your disqualification. Your mortgage rates will keep on increasing and will prove very troublesome for you. So, always keep a check on your expenses and new credit card openings during the loan application process. You certainly do not want to be in the debt web, right?
- Switching Jobs Before The Closure Of Your Loan
As the majority of the lenders demand proof of employment, switching jobs before your loan closure can raise some red flags. Changing your job at the eleventh hour can significantly affect your income’s reliability and steadiness. Considering all such factors, you might cause your deal to fall apart.
The Bottom Line
Now that you have known how to avoid the top 5 biggest mortgage mistakes, you can make your home purchase without burning holes in your pocket.
By using a mortgage calculator, you can find out how much house you can afford. Don’t forget to find the best mortgage lender with the lowest rates, so you don’t overpay for your new home.
Don’t have time to do so? If so, choose a professional like PureLoan for saving a thousand on your mortgage rates! We have a team of experienced professionals that help you to find out the best mortgage rates that can assist you in making a wise home-purchasing decision.
To know more about services, visit https://www.pureloan.com/ today!!
