When it comes to getting a mortgage for your home, there are a lot of details to keep in mind. Whether you are looking for a new one or refinancing your current loan, you can have a better experience and be happy with your mortgage terms if you plan ahead. A small oversight or something “small” forgotten during your mortgage process can quickly add up, leading to big mortgage mistakes. These types of mistakes can also affect your bottom line and add up to more money out of pocket. Listed below are some basic planning steps to follow which can help you avoid some common mortgage mistakes.
- Research your lending institution options. Before you decide on which bank to use, check out local companies, such as neighborhood credit unions. While big banks have a larger pool of funds to work with, you won’t necessarily benefit directly from their “buying power”. Credit unions, or community owned banks have the advantage of being “on the street” and being able to provide direct insight to the market of an area. Customer service and response times are often better with a local institution as well. You have a better chance of meeting with the decision makers, which can be helpful if you have special financial circumstances that can make getting a mortgage difficult.
- Watch Mortgage Interest Rates and be ready to act. Mortgage rates fluctuate daily. Keep track of how rates are changing so that when you are ready to get a loan, you can act quickly on an ideal interest rate. With the speed at which rates can change, if you take too long to decide on which loan you want to take, you run the risk of losing a great rate. This could end up costing you with additional money in your payments going to cover a higher interest rate.
- Make Additional Payments. Often when a buyer gets a mortgage, they plan for paying the payment that is set each month. But if you can pay a little bit more each month, or a few times a year, it can up to greater savings. The more of your principal you can pay, the sooner you can pay off your loan. One option to help make this happen with ease to establish bi-weekly mortgage payments. This greater frequency of payments will help lessen the money paid interest over the life of your loan.
- Keep your credit in check. Credit scores are heavily weighed when it comes to mortgage loans. Even one late payment on a credit card or loan can dramatically affect your score, and take years to get off your record. Keep your payments on time and check your credit report regularly, at least once a month while you are in the process of getting a loan. Knowing your credit score will help you know what kind of interest rate you can qualify for. The better your credit, the better your rate will be.
- Review your terms and rates often. Once you have your mortgage and buy a home, don’t assume you have the best rate you can get. As interest rates change over time and home values appreciate, it is beneficial to regularly check interest rates and watch for new loan products. A refinancing of your loan from time to time can end up saving you thousands when you take advantage of a better rate or equity in your home.
By keeping these simple steps in mind when you are ready to buy a home, you can save some money and have a better home buying experience. When you are ready to buy or sell your home, we at Haylen Group are here to help you with all of your real estate needs! As your buyer agent we will strive to give you the best support we can. Call Helen Chong at (408) 800-LIST or email at Helen@HaylenGroup.com. You can also visit us at our website for available listings and additional information.