Financing a home is a process most borrowers only go through a few times in their life and it isn’t easy to stay on top of all the of the inns and outs of the financing process these days. If you’re thinking about getting a new mortgage in 2014 or making a change to the financing you already have, the 7 tips below should help you avoid costly mortgage mistakes.
1. Not reviewing your condo documents
Recognizing most condo buyers don’t understand all of the documentation provided and should defer to their real estate lawyer, at the very least take the time to read through the minutes of the last year’s meetings of the condo association. These minutes provide not only details about the financial health of your condo fund but happenings around your complex too. You will also see if there are any upcoming renovations required or more importantly, whether there will be any special assessments due to limited funds accumulated in the condo reserve fund. A special assessment could result in cash out of your pocket, so ensure you are clear on what is in your condo documents before committing.
2. Choose the right professional for you
Your home will likely be one of the largest debts you will ever have so it’s important to ensure you are getting proper guidance about all the products and services available to you before you make a commitment. Ask friends and family for referrals and if you are looking online, be sure to read any online reviews posted about that person. If you aren’t comfortable with the advice or opinions of any professional, don’t be afraid to get a second opinion. A trustworthy professional should send you in the right direction even if you are just making a preliminary inquiry and you shouldn’t have to provide a detailed credit application if you’re just looking for general information. Once you are comfortable that you have found the right person for you, be prepared to provide extensive details about your financial position along with supporting documentation.
3. Don’t pay attention to the wrong details
Rate is important, yes, but so is the payment amount, the payout penalties and the pre-payment privileges. When it comes to borrowing a large amount, like a mortgage, it is imperative you read the fine print of all documents before you sign. This allows you to go through all the details with your mortgage professional to ensure you have a thorough understanding of the commitment you’re making.
4. Ignoring your credit
I can’t stress enough how important a good credit rating is. Not only does it qualify you for best rates on everything from car loans, credit cards, and mortgages, even landlords are looking at your credit before renting you a place. Ask for a credit consultation from a qualified professional, by that I mean, if you want to get a mortgage, talk to a mortgage professional about how your credit needs to look in order for you to qualify for a mortgage at best rates. If you are not there yet, ask what you need to do and make a plan which you can commit to.
5. Not getting a pre-approval
There’s nothing worse than putting in an offer on a home and then not qualifying for the financing. Avoid the disappointment by getting a pre-approval. And when rates are on the rise, also makes sense to get an interest rate held for you for up to 120 days (4 months). Do be advised even if you are pre-approved, you still need to get the property and supporting documentation approved by your lender as well as the insurance company if you are putting down less than 20% of the purchase price and require a “high ratio” mortgage.
6. Don’t throw out your important documents
If you plan on applying for any financing in 2014, be prepared to provide documentation confirming the details you stated on your credit application. Most importantly, income documents like paystubs or tax returns and Notice of Assessments. Also important are any documentation that has to do with your credit. If you’ve cleared up any derogatory credit, keep the documents confirming that just in case your credit report isn’t updated by the time you want to apply for any borrowings. By having these documents on hand and accessible, you avoid having to track the paperwork down at a later date.
7. Don’t hesitate to wait
Last but not least, short and sweet. 2014 may not be your year to get a mortgage. Don’t worry as interest rates are predicted to stay low and even though prices are projected to go up a bit, they are still well within the affordability range. So don’t hesitate in putting off getting a mortgage for another year as I believe, it’s better to wait than to rush into an unaffordable situation.
When it comes to getting a mortgage of any type, nothing replaces an in-depth consultation with an experienced mortgage broker about the mortgage process and the many financing options available to borrowers in 2014.
If you’re looking for an experienced Mortgage Broker, contact the Mortgagegirl at 780.433.8412 or firstname.lastname@example.org. Stay in the loop my following on Twitter @mortgagegirlca.