Getting a mortgage approved is quite a task and you have to go through several steps for it. At the end of all these steps, you want to feel a satisfaction with what you have gained and not disappointment or regret. In order to get the right mortgage rate and the best loan for you, you should avoid making the following mistakes-
- Calculate expenditures- when you are looking for a mortgage, bear in mind that you are going to have to make payments every month. It is vital that you ensure that the payments do not take up a huge proportion of your income. If this happens, you are not going to be left with enough money to run your household throughout the month
- Homeownership costs- these are costs that you do not think about because of the assumption that they are rare expenditures. However, research indicates that 1-2% of the cost of the house ends up being the cost spent on maintenance and repairs. Additionally, you will have other costs like property costs that you will also have to pay for. And contrary to popular belief, ownership costs increase with the age of the house
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- Not doing enough research- this is one of the most common mistakes made when applying for a mortgage. Individuals fail to look at multiple lenders and instead choose to go with the first lucrative one they see. Make sure that you take the time to find a number of lenders before shortlisting and deciding on the one best suited to you. Failing to do research could lead you to pay more when you could have simply devoted more time and spend a lot less
- Ignoring APR- the annual percentage rate or APR is something that you must definitely consider. Several lenders offer low mortgage rates but charge substantial fees to cover this. In order to avoid paying extra, you must compare the “truth-in-lending forms” of lenders to first check which mortgage will cost you lesser
- Making low down payments- it is necessary for you to put down at least 20% of your borrowed amount so that you get a good mortgage rate. Otherwise, you will have to pay a mortgage insurance which will add about $100 to your payments every month. The reason for this, is so that the lender is insured against the possibility of you not being able to make your payments in full
- Not fixing credit reports- for you to get a mortgage at a good rate, it is necessary for you to have a good credit history. Before you apply for a loan, make sure to sit with your broker and go through your credit history and pay off any outstanding payments that will give you a bad reputation. In the case that you do not check this beforehand, you could either have to pay a higher rate and in the worst case, your loan could get rejected. Speak with your financial advisor for ways to manage your credit score.
- Not choosing a VA loan- VA loans are the best option especially for those who have served the country or are currently serving it. These loans guarantee competitive rates as well as a home that can be moved into immediately. However, the biggest disadvantage of this loan is that there is a funding fee based on how much you are borrowing
Contact mortgage brokers near you and meet with their representatives in order to get a good understanding of the process. Best Mortgage Montreal is one such company that offers excellent mortgage rates depending on what your budget is. Additionally they have offers such as free mortgage insurance for the first three months of repaying your loan. Click on to request for rates as well as chat with their professionals today.