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Mortgage Do’s and Don’ts
Many people make mistakes when it comes to mortgages. When you are applying for a mortgage, and even after you have successful received the mortgage, use this list of do’s and don’ts to help guide you.
Do’s
Check your credit report at least six months prior to applying for a mortgage. The last thing you want when you apply for a mortgage are surprises about your credit. Once you are certain you are going to apply for a mortgage, you should check your credit report, even if you are sure that everything is ok. You need to know what the loan officer is going to see when he checks your credit report.
When you check your credit report makes sure that there is no inaccurate information such as accounts that do not belong to you, payments reported as being late that were really on time, incorrect balance, etc. Dispute any inaccurate information. Also have any negative accounts that are older than seven years removed from your credit report.
Shop around among various loan providers. You should never accept the first quote you are given by a loan provider. There is a very good chance that you can receive a lower rate elsewhere. The way to make sure you are receiving the best interest rate and loan terms is to shop around among other loan providers. This includes different banks, savings and loans associations, and mortgage brokers.
Negotiate to reduce or eliminate some of the fees. Do not sign the loan papers until you have at least attempted to negotiate one or more terms of the loan. What you are quoted by the loan offer isn’t written in stone until you agree to pay it sign your name on the loan documents. Many of the fees “required” by loan providers aren’t required after all. Try negotiating a reduction in the interest rate or the points charged by the loan. Ask the lender to detail the fees included in the closing costs. This is another opportunity to negotiate a lower fee.
When you are negotiating with the loan officer, make sure that he (or she) is not reducing one cost while increasing other.
Don’ts
Make any assumptions. Making assumptions when it comes to a mortgage can cost you thousands of dollars. Nothing is a given when it comes to mortgages unless you have it in writing. Avoid making assumptions about anything in the mortgage process. If you have questions ask them. If you happen to make assumptions, make sure they are correct before making any decisions based on those assumptions.
Sign any contracts you don’t understand or don’t agree with. It is vital that you fully understand the documents you are signing. Do not sign anything that you have not read. Do not sign anything that you do not understand. Do not sign anything that you do not agree with. After you sign the loan documents ignorance is longer an excuse; your signature means that you comply. If there is information you do not understand, have the loan officer go over it with you. Alternatively, you can go over the documents with an attorney.
Wait until you start receiving delinquency notices to alert your lender of financial trouble. People run into financial trouble all the time. Hoping things will get better will not save your home when you are served with an eviction notice. When you start receiving delinquency or foreclosure notices, it is usually too late. If you hit a financial pothole, the best thing you can do is let your lender know as soon as it happens. Most lenders have programs, such as special forbearance, designed to assist homeowners in times of financial distress.
Keywords: Mortgage
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