Basic Mortgage Mistakes That All Beginners Must Avoid

Mortgage is one of the biggest things in many people’s lives, and nobody wants to take the risk of it going bad. For beginners, this is a bit of an issue, as they don’t have too much knowledge of what to do and what to avoid, and may fall under various kinds of traps laid by fake mortgage dealers. That is why, it is essential to know of a few simple mistakes that everyone must avoid, when dealing with mortgage.

Credit – Past and Present

One of the biggest factors that affect one’s eligibility and interest rate for mortgage is Credit History. Those who have had a bad Credit History are definitely in for some trouble. In fact, when married couples apply for mortgage, a bad Credit Report for even one of them could be a major problem. This is the reason why it is advised to correct one’s Credit Report, months before they even plan to apply for Mortgage. Moreover, it is suggested that no new credits or Auto Loans etc. should be taken while applying for Mortgage, as that could further kill one’s eligibility chances, or could also pump up the interest rates to a very high number.

Stability in Income Source

If one is in the habit of switching jobs very frequently, then that too could cause trouble while applying for Mortgage. All lenders want to ensure that the borrower will pay back the money within the stipulated time period, and for that, it is essential to know if he/she has a stable source of income or not. One’s report should have a stable job for a long period of time, to show to the lenders that a certain amount of income will come in every month for sure. The Mortgage rate will then be calculated accordingly. In case one is planning for a job switch, it should happen after the Mortgage has been approved. But even in that, change of professions is not advisable; only a change of job in and around the same income bracket is good.

Carelessness and Impulsiveness

In an attempt to close the deal as quickly as possible, many people often do not read their loan documents and other papers carefully, which may have some hidden costs or other expenditures involved. These may not have been calculated in the beginning, and can be quite a shock for the borrower later on. Therefore, it is advisable to read all documents properly.

Moreover, one must not be impulsive in their approach. Yes, there are plenty of loan and mortgage options available in the market with brilliant rates and offerings, but nothing can be trusted until and unless the fine print is properly read and checked. Hence, to shop around and keep looking for options is the best thing. Do not settle for just one bank or financial institution. One must compare with multiple other choices, and then narrow down on the one that suits his/her requirements and financial status the most.
With careful planning and awareness, Mortgage can be quite an easy process.