Top 8 Mortgage Mistakes To Avoid

Top 8 Mortgage Mistakes To Avoid
By [http://ezinearticles.com/?expert=Josh_Mezger]Josh Mezger

Every day, there are people who commit some huge mortgage mistakes. As this is one of the biggest financial duties you will make in your life, it is vital you learn how to avoid committing common mistakes a lot of people make. You will be managing or paying for your mortgage for the next 10 to 30 years, so be sure to read the tips below to have a pleasant property buying experience.

1. Not shopping around

Compared before, when only 4 major banks provide 1 or 2 types of mortgages, now there are numerous options for home loans you can acquire from a several diverse types of lenders. Do not immediately accept the first offer. Understand that the lender you will choose will acquire six figures from you over the loan's life. Look around and compare the features and costs of the various types of loans. Find the type of loan that is right for your circumstance.

2. Not Checking Your Credit First

Check your credit first before beginning your quest to buy a home. Try to find out if you have problems with your credits. Learning about certain issues in your credit allows you to find resolution before getting the loan. Understand that credit issues can affect the amount you are able to borrow from your lenders.

3. Not Learning the Total Housing Payment

Many first time home buyers commit the mistake of not having a complete understanding of the total mortgage payment. While they are able to include, interest, insurance, taxes and principal in their budget, many fail to include insurance premium and property taxes.

4. Borrowing too much

Even though you managed to get approval of borrowing large amounts of money, you should not hastily accept it. If someday things do not go in your favour and you find it extremely difficult to pay for the loans, then you could lose your home, stamp duty, deposit and other investments.

5. Getting a 15-Year Mortgage without Financial Security

While, monthly payments are higher, there are benefits from acquiring a fifteen-year mortgage. One, the duration to pay off your loan is lesser compared to the traditional thirty-year mortgage. Two, you will pay lesser interest due to the duration of the loan.

6. Not Reading The Documents

Although, your real estate agent will do his/her best to protect and guide you during the property buying process, your agent cannot manage your mortgage loan as this is between you and the lender. Mistakes can happen and it is possible for your lender to miss out or fail to explain some details within your loan. So, when meeting up with your lender to sign the documents, make sure to thoroughly read each page and ask questions.

7. Don't Underestimate Your Housing Payment

The payment for your house does not only consist of the mortgage payment, you will also have to pay for property taxes, homeowner's insurance and some required homeowner's associated fees. Aside from taking these payments into consideration, you will also have to think about your home's repairs and maintenance.

You should study and understand your personal income and expenses in order to learn how much you can truly afford. Make sure to allocate enough money for potential expenses in order to avoid bad surprises that many home owners experience when purchasing a home.

8. Not planning for interest rate rises

Your mortgage can experience interest rate fluctuations, unless you are on a completely fixed loan. It is hard to determine the changes in interest rates over the six months duration, so much more for the 25 year mortgage. Taking this into consideration, you need to secure yourself by planning for at least 2 interest rate increases over the first year of your loan when certain movements will provide the most effect on your monthly payments.

You will be fine as long as you are cautious and perform the necessary research. It is important that you completely understand your financial situation so you won't just make any hasty financial changes throughout the home buying process. Have the time to study and learn your financial options. Remember the mortgage mistakes you need to avoid and you will have a smooth real estate transaction.

Home financing can be a crucial component of any real estate transaction. At joshmezger.com you will discover some amazing mortgage information that may be able to support you with the purchase of your next [http://www.joshmezger.com/mortgage.html]Perth apartment.

Article Source: [http://EzineArticles.com/?Top-8-Mortgage-Mistakes-To-Avoid&id=8694768] Top 8 Mortgage Mistakes To Avoid