Avoid These Common Mortgage Mistakes

by Susan Brown, Broker/Realtor® 07/19/2020

Image by Jan Vašek from Pixabay

One of the biggest hurdles people face when looking for a home is applying for a mortgage. While applying for a mortgage is relatively straightforward, finding favorable terms might be more challenging. Many buyers are surprised by how broad the terms of a mortgage might be. With this in mind, it is critical to understand the most common mistakes people make when looking for a mortgage.

Not Looking Locally First

The most common mistake people make when looking for a mortgage is not looking locally first. Many are tempted to use the internet to seek out a loan. While there is nothing wrong with looking around (in fact, this is encouraged), don't forget to head to the traditional bank or credit union a few miles down the road. There are professionals who are interested in building a relationship with the local community often providing more favorable terms.

Assuming All Mortgages are the Same

Don't assume all mortgages are the same. This is far from accurate. Applying for a mortgage can be an involved process that people rarely want to do this more than once. You may assume the next lender will offer similar terms. In reality, some lenders might be willing to wave origination fees or points on the mortgage. Some might even offer a lower interest rate, be sure to ask what special offers may be available.

Not Locking In the Rate

One of the common questions people face when applying for a mortgage is whether or not they would like to lock in the rate. The fear of locking in the rate is that, if the mortgage rates drop, they might miss out on the opportunity to save money. On the other hand, people also forget the alternative. The rate might actually go up. The downside to this is that their monthly mortgage payments may not be affordable anymore. Go ahead and lock in the rate.

Not Putting Enough Money Down

Lastly, many try to save money by not putting enough cash down. When you don't put enough money down, you may end up with a higher interest rate and a higher monthly mortgage payment. Additionally, you may have to purchase Private Mortgage Insurance, also known as PMI, for the lender making the monthly payment even higher. To prevent this from happening, make sure the down payment is large enough to satisfy the lender, usually between 10 and 20 percent.

About the Author
Author

Susan Brown, Broker/Realtor®

Hi, I'm Susan Brown. Every sale has a buyer, a seller, a challenge, a peak, a valley, a closing, & a solid story. A good agent makes that story pleasant. Although I lean towards representing Sellers, I find myself with Buyers who seek an active listener, a knowledgeable agent & a futurist. Let's begin the narrative.

PROFESSIONAL INFORMATION

NC Real Estate Broker: REALTOR, 2012 to current

CA Real Estate Sales Agent/REALTOR License, 1979-2019 (25+ years) 

Los Angeles, CA: Internet/Online/New Media Sales/Business Development-Startups, IPO & Post IPO

Los Angeles, CA: Financial Marketing @Quotron Systems, now Reuters

NC-UNCW: Center for Innovation & Entrepreneurship: Google Analytics Certified

Boston, MASS: High School Math Teacher

CREDENTIALS & MEMBERSHIPS:

BA Degree: University of Massachusetts, Amherst Mass

Distinctive Properties® -Certification, Luxury Homes, ERA®

Own America-Certification, Investment Program, Coldwell Banker Seacoast

Seller Security Plan (SSP®)-Certification, We Buy Homes, ERA®

Member: Cape Fear Realtors (Local MLS), NCAR (No Carolina Association of Realtors), & NAR (National Association of Realtors)

LEED (Vers. 4-Course Completion: US Green Building council Chapter ((USGBC) 9/17/2015

COMMUNITY INVOLVEMENT:

CAPE FEAR MLS: Governmental Affairs, Global Business Council, Project Member

Cucalurus Film Festival, Volunteer

Kenan Chapel, Landfall, Wilmington, NC, Volunteer

Wilmington, Jewish Film Festival, Volunteer & Grant Writer

Independent Film Festival, Volunteer

Cape Fear Women in Technology, Founding Member

OLLIE (Osher Lifelong Learning institute), UNCW, Wilmington, volunteer

AMERICAN ASSOCIATION OF RETIRED PERSONS (AARP): Wilmington, Volunteer

WRAR MLS: Governmental Affairs: Strong Neighborhood Action Program (SNAP), Project Member