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| *Ostroff, Fair and Company>>>Renting & Real Estate |
What are common mistakes that are made when getting a house loan? |
What are common mistakes that are made when getting a house loan? -getting an ARM without understanding what they really are -Going for the lowest interest rate without looking at the APR, fees, points, etc -Not shopping around for the best 'deal' and not common, but can put you in financial ruin: -Getting an interest-only or (worse) a reverse amortization loan Okay... I would def stay away from balloon payments!!! Otherwise... make sure you go to a really good, local bank so that you can talk to someone face to face. They might sell your mortgage later, but as long as you have someone across the table from you for the important part (setting up and accepting the loan), you'll be okay. Talk to friends and co-workers to find out who they worked with so that you make sure you are in good hands. Also... the loan officer should run all different loan options for you as "good faith estimates". You aren't bound to anything with these estimates, but it will show you the differences in your payments if you have a 10-yr mortgage as compared to a 30-yr mortgage or a big down payment as compared to a small down payment. They should be patient with you and answer all your questions! I think that the biggest mistake would be not knowing what you are getting into. You need to ask questions, talk to people who have mortgages, and read all the fine print. Also, we just bought a house, and we were really surprised at how easy it was! Good luck! *Buying with what you are approved for instead of buying what you can really afford to pay each month. *Putting no or very little money down. This costs a lot of money over the life of the loan and if less than 20% down will cause you to pay PMI. *Interest only loans. *Balloon loans. *ARM's. Listening to a realtor, that's a huge mistake!! All loans are negotiable--even bank loans. Negotiate everything, even the "points". We're not talking dollars -- we're talking thousands upon thousands of dollars in the life of a 30 year loan. granted, you may not stay thee for 30 years, but alway think that you will and you'll be better off. Good luck. Make sure you negotiate the price of the house. Don't believe a realtor, check everything. One very important aspect overlooked buy a lot of buyers. Realtor's like the word "comp". They always say they will show you the "comps". Also ask them to show you the homes that have expired listings that haven't sold. They are a "comp" as well. Betta---The killer for home loans is debt to earnings ratio. What it is --- owe too much on monthly installments and no room for a mortage. NO LOAN Low credit score. Bad debt. Obligations not paid on time or not al all. If you want a home loan--pay off all the creditors even bad debt that you did not pay. Buy a home then buy a new car--OK... Need 20% down to avoid buying mortage insurance. Could cost $150 month and is controlled by the state. Now is the time to stop spending... If you have excellent credit and your husband credit is in the toilet... NO HOME LOAN. Good does not cover up evil in the financial market of money... Whats fair is fair---you do not like to pay bill and the bank does not give you a loan for a home. Who is the loser now... Going to internet lenders or those that spam here for business. Making your decision based on the lowest interest rate. Not asking about closing costs, terms, fees, pre-payment penalties, anything that will cost you money. |
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