Since a mortgage opens the door to home ownership, stay clear of these pitfalls to make the process smooth and hassle-free.
- Not knowing how much you can afford
Check your budget. Only borrow how much you can truly afford. Factor in all costs, such as, the monthly mortgage, insurance and maintenance and utilities so that you are not financially strapped to make your monthly payment.
- Not checking your credit
Do not wait until you apply for a mortgage to know your credit worthiness. Speak with a mortgage consultant before seeking a loan so that you can alter your finances before applying. Not having a good credit history can increase your mortgage interest rate or worst still, leave you with no approval.
- Applying for new credit alongside the mortgage
Mortgage providers will need evidence of your debt repayment ability so applying for new credit, such as, an auto loan or a credit card before and during the application process may prove detrimental to your credit rating. Postpone any huge purchase until after you secure the loan.
- Changing jobs frequently
A consistent employment history is an indicator of stable income, so if you’re a job hopper, you might be considered a risky candidate for a loan. Try and stay in your current job until you’ve signed the paperwork.
- No long-term savings
If you do not have sufficient savings or long-term assets, banks might be reluctant to offer you a mortgage. If you think that transferring funds from a relative’s account days before applying might do the trick, think again. This short-term fix will be picked up as soon as the bank statements get printed and paper trail investigated.
- Not shopping around
You don’t want to be stuck with a wrong mortgage deal, so investigate all of your options. There are multitudes of loan products available in the market so compare different banks and mortgage lenders to find the best deal before signing any contract.
- Lying
Do not make false statements on your loan application. This may not only cost you your mortgage but also ruin the chances of getting one in the future.
- Skipping a home inspection
If you can’t do it yourself, hire a professional. Find out if the roof or basement leaks and whether the mechanical systems are in place so that you can include the cost of repairs and renovations into your budget.
- Not reading your loan documents
Go through all the documents before signing so that you understand and agree with everything and don’t get saddled with terms you disagree with.
Ensure to seek guidance from our proficient mortgage calculator, who can help you navigate the mortgage market and discover the perfect solution for your specific requirements.
