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December 9, 2019
While buying a house can and should be an exciting time of celebration, there are many mistakes to be made if you don’t know what to look for. Even lack of shopping for your home loan can be a huge mistake! Just like any big decision you’ll make, it’s important to gather as many facts as you can so you can make the best decision for you!
In my years as a loan officer, I have seen first-time homebuyers, people who have made several family moves, and individuals who are pursuing investment properties make the same mistakes when it comes to shopping for their home loan.
When you’re making a big decision like buying a home, there is a lot of terminology and options you will need to familiarize yourself with. I know we live in an age where everyone wants to do things online, but learning what you need to know about borrowing hundreds of thousands of dollars for your home loan probably isn’t one of them.
How do you avoid this mistake? Easy- before you even start shopping for a home, find a reputable mortgage lender in your area, and ask them to help you with a pre-approval. This is basically an overview of all your financials, and then going over a couple of mortgage scenarios with you. This will help you prepare for payment, down payment, and anticipated scenarios for the future — and most of all, this will help you narrow down what price point you should be looking at when shopping for a home.
Most people don’t realize that many of the mortgage calculators you’ll find online are truly all over the map in terms of amortization schedules, mortgage insurance, estimates for property taxes, anticipating things like difference in the percentage of mortgage insurance based on your credit score or the property type, the occupancy type….. and. so. much. more.
Call your loan officer, and go over these scenarios with them, and you can likely use an app that they provide! Honestly, we’re not out here living in the stone age.
For example: we personally use an app with all our clients that is specific to the program that we have selected to their debt, their assets, their credit, that actually plugs in the exact figure that we are using for mortgage insurance. They can change figures for property taxes and insurance that they may find quoted elsewhere.
This is where you will find the most accurate payment scenarios so you can budget for your home purchase.
Payments that you’ll have to make when closing on your home will end up being more than just your down payment. Other things to consider are inspection fees (anywhere from $300 to $2000 depending on what needs to be inspected), appraisal costs, or even fees some lenders may charge you to lock in your interest rate.
The key here is to not get too focused on “I have x amount for my down payment” or “I only want to pay x amount for my monthly payment”. You’ll need to factor in things like principal interest and taxes, then there’s HOAs and home warranties. All things that your loan officer should have you totally familiarized with. A reputable loan office will give you a full estimate for ALL costs BEFORE you submit offers, so you are fully prepared for what you’ll need for closing.
This could be many things. Applying for new credit, changing jobs, making large cash deposits that we can’t document… all big big no-no’s for making you look like you are a safe person to lend money to. We want everything to stay as secure and stable from the moment that we pre-approve you until the moment you close. Last-minute lifestyle choices are especially problematic if you don’t communicate them with your loan officer!
If, God forbid, something were to happen, don’t sweep it under the rug and hope no one notices! Let your loan officer know immediately initiate damage control.
So I get it…
Getting a mortgage may seem like a painful process. Your loan officer may seem like they are all up in your business, always asking questions, collecting multiple documents from you … but I promise it’s way less painless than you think! Taking the time to avoid these really common mistakes could actually end up saving you a couple of hundred thousand dollars! seems reasonable when you think of it from that perspective, right?
If you want to know more on this topic, get in touch!! Just let us know in the comments below and we’re happy to answer your questions 🙂
Lizy Hoeffer NMLS ID # 260183. AZ LO-0913409 I am authorized to conduct business in the state of Arizona. All loans subject to underwriting approval. Certain restrictions apply. Call for details. THIS SITE IS NOT AUTHORIZED BY THE NEW YORK STATE DEPARTMENT OF FINANCIAL SERVICES. PHONE NUMBERS DISPLAYED ARE NOT FOR USE BY NEW YORK BORROWERS. NO MORTGAGE SOLICITATION ACTIVITY OR LOAN APPLICATIONS FOR PROPERTIES LOCATED IN THE STATE OF NEW YORK CAN BE ACCEPTED THROUGH THIS SITE. CrossCountry Mortgage, LLC. NMLS1925878, 3100 West Ray Road, Suite 201 Office 212, 218, 219 & 228, Chandler, AZ 85226 (www.nmlsconsumeraccess.org)
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