4 Mortgage Mistakes Homebuyers Should Avoid
Before applying for a mortgage for that home you’ve had your eye on, there are some things you should keep in mind to protect your finances. Making costly mistakes now can come back to haunt you later. Consult with experienced mortgage lenders in AZ to assist in this process. Here are four common mistakes many homebuyers make with their mortgages:
- Skipping the research process.
Failure to compare lenders is the worst mistake you can make when shopping around for mortgage rates, as most lender fees are negotiable and vary widely by financial institution, according to U.S. News and World Report. All you have to do to save yourself a few bucks on your mortgage is do your research by calling each company or visiting their website for free rate quotes.
- Failing to lock in your rate.
If you don’t secure a low rate right when you see it, it could be gone the next day, or even the next hour. That’s why this step is so important. Get your mortgage rate in writing — until then, it’s no good to you. These rates once locked are usually good for a week or even as long as a month, so be sure to inquire about the duration. Once the deadline is up, your lock releases if you don’t move to the next step in the process.
- Opening new lines of credit.
While you do want a strong credit background with at least a few healthy trade lines to show you’re a good borrower, you never want to open up new credit cards or car loans right before or while applying for a mortgage. This makes you look like a big credit risk to the lender, and your credit score could suffer as a result. While this won’t necessarily disqualify you for a mortgage, it can boost up your interest rate or bump your eligibility.
- Failing to get pre-approved.
Pre-approval is a necessary step if you’re a serious home buyer as this shows potential sellers that you are ready and willing to get the next step moving. With a pre-approval, a lender essentially says you’re qualified for a certain dollar amount for a new home, after looking through your credit history, income, assets and employment. How much you can afford depends on all of these factors and more. You should receive a letter from the lender spelling out your pre-approval so you can take that to sellers when you’re ready to buy.
Follow the above tips to maximize your chance of getting the best rates. Trusted Arizona mortgage brokers can help you avoid these mistakes. If you’re looking for the most experienced team of Arizona mortgage brokers, look no further than Marquee Mortgage. With a combined 70 years of experience in the mortgage industry, you can be certain that the brokers at Marquee Mortgage will work to get you the best possible loan no matter what your financial situation.