10 Critical Mistakes Most People Make When Applying for a Mortgage
Mistake #1 – Becoming a ‘Rate Shopper’
Lenders love to run ads on TV and radio bragging about their super-low rates. Unfortunately, these rates aren’t all they’re cracked up to be. The rates you see in these advertisements are usually based on the best-case scenario. They require that you pay additional up-front fees and that you possess a perfect credit history in most cases.
This is why we refuse to post rates on our website. It would be a disservice to you, the valued client. Hundreds of loan programs are available and your rate will depend upon which program you choose. Choosing the wrong program might get you a great interest rate, but cost you tens of thousands in the long-run for other various reasons.
This is why we prefer to meet with you, discuss your financial goals and then recommend a program that has not only a low rate, but that will also help you achieve your goals. Schedule a NO COST consultation with us today by calling or visiting our website.
Mistake #2 – Not obtaining a Mortgage Pre-Approval
In some areas, a seller may not even deal with you until they can verify that you can actually afford to purchase their home. To them, a pre-approved buyer is essential. But even in cases where pre-approval is not mandatory, it is still wise to consult with a reputable mortgage company and receive a pre-approval. Especially considering that the pre-approval process is fast and easy.not to mention at NO COST to you!
Once you are pre-approved, you can embark upon your home buying journey with confidence, knowing that once you find your dream home, obtaining the money to buy it will be the easy part!
Mistake #3 – Believing You Need Perfect Credit and 20% Down to get Approved
Nothing could be further from the truth. Even if you have bad credit, no credit or no down payment, you may still qualify for a loan. Programs like FHA and VA make it easy for anyone – even First-Time Homebuyers – to get the financing they need to afford their dream home.
Every month that you wait to apply for a loan, is a month where you put money into your landlord’s pocket instead of investing it in your future. DON’T WAIT. It’s never been easier or cheaper to qualify for a home loan than it is RIGHT NOW.
Schedule a NO COST Pre-Approval Session with us today by visiting my website. We can’t wait to say ‘Congratulations – You’re Approved!’
Mistake #4 – Getting your loan from an Internet Lender
Large internet-based lenders claim that they have thousands of lenders under one roof fighting for your loan, and because of this, you’ll get the best rates and fees. Now the question you need to ask is: ‘If this lender is so cheap, how can they afford this million-dollar television ad campaign?’ The truth is that you will likely pay similar costs whether you obtain a loan from the Internet or from an in-town lender.
And if you choose an in-town lender, you’ll get a lot better service. Why? Simple – local companies are more concerned about their reputation and therefore will do a better job of serving you. Most of the people we deal with are referrals from previous clients who were so happy with our service; they couldn’t help but tell their friends and family!
Mistake #5 – Working with the Lender your Realtor® Recommended
Many times, Realtors® will refer their clients to a particular lender. Sometimes, it’s because they know that the lender is truly the best. But far too often, it’s because the Realtor® has a special referral relationship set up with the Mortgage Company they are referring you to.
This is why you need to interview your mortgage lender. Don’t just take your Realtor’s word for it! We recommend that you read our special report: ’7 Questions Lenders Hate!’ to learn what questions you need to ask when interviewing a mortgage lender.
Mistake #6 – Working with a Lender Who Offers Few Loan Program Choices
Not all lenders are created equal. Some lenders, (even ones who ‘seem small’), have a larger company who stands behind them with dozens, or even hundreds of loan programs. As a consumer, this is great news for you.
The more loan programs there are to choose from, the better your chance will be to find one that fits your specific needs. Be on the lookout for lenders who only have a few loan programs and try to ‘size you up’ to fit into one of their restricted loan program choices.
Mistake #7 – Not Understanding the Difference between Banks and Lenders
You need to understand the difference between banks and individual mortgage originators. Banks handle savings accounts, car loans, investment accounts, etc. Mortgages are just one of many services they provide.
We’re different because we only deal in mortgage loans. We sleep, eat, and breathe mortgage loans and nothing else. Would you go to a general physician to have heart surgery performed? Of course not. So why go to a big bank, when what you need is a mortgage specialist?
Mistake # 8 – Believing that Lenders are your Enemy
Studies show that most American’s would rather see their dentist than have an appointment with a mortgage loan officer. The likely reason is that they are afraid of rejection – afraid of the big bad loan officer who will stamp a big red NO on their application. This is far from reality. We don’t make any money unless we can say YES. As a matter of fact, we love to say YES to people just like you.
Mistake #9 – Not Disclosing Everything to Your Lender
Everyone has had a few financial problems in their past. We understand. We’ve heard it all and seen it all. So, when you come into apply, just be honest and disclose any past financial issues. This will make it easier for the lender to gauge your situation and provide you with best loan for your needs. If you hold back information and the lender finds out later, it could greatly affect the speed and difficulty of obtaining your loan. Remember, honesty is the best policy!
Mistake #10 – Making Critical Mistakes Prior to Applying for Your Loan
Without the proper guidance, you are likely to make critical mistakes when it counts most – immediately before you apply for your loan. These mistakes may cost you thousands, or at worst, deny you the privilege of owning your own home. Here are some best practices. Within 6 months of applying for your loan:
. Don’t make any large purchases on credit (cars, expensive furniture, electronics)
. Don’t move large amounts of money around between your various accounts
. Don’t apply for credit cards or other loans
. Make all of your credit card and other loan payments on time, every time
. Don’t switch jobs, as employment stability is a key factor in getting approved
BONUS! – Mistake #11 – Not Getting a Written Lowest Closing Cost Guarantee
All lenders are required by law to provide what is called a Good Faith Estimate of Closing Costs. Use this ‘Good Faith Estimate’ as a tool to find the lowest price. You should ask any lender you speak with for a guarantee that clearly states, in-writing, that they have the lowest bottom-line closing cost.
If they can’t provide you such a guarantee, in writing, then you should find another lender. We guarantee our closing costs, in-writing. As a matter of fact, we are so confident that we have the lowest cost that we’ll PAY YOU cold-hard cash if you can find a better deal elsewhere.
For more information, schedule a pre-approval or application appointment with us now. At our appointment, we will give you a form that guarantees the lowest costs, in writing.