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Common Mortgage Mistakes to Avoid It’s no secret that getting a mortgage today has become a lot easier compared to how it was a couple of decades back. The fact is getting a new home or refinancing a current mortgage is very easy and you literally need two thing: a down payment and a good credit score. But then again, you need to acknowledge the fact that if it’s very easy to get approved for a mortgage loan, it also is as equally easy to make costly mistakes. For this article, let us help you learn the common mistakes in getting this type of loan, most of which will put you at risk of damaging your credit score or even disqualifying you from getting a loan in general. The objective of this article is to give you a heads up on those mistakes you’re likely to make so that you end up completely avoiding them once you decide it’s high time to get a loan. 1 – Getting a loan only to end up filing for bankruptcy or foreclosure.
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For some people out there, it’s really sad to know that they aren’t really concerned about ending up filing for bankruptcy or having their property foreclosed. What you don’t realize is that if you end up on either of those scenarios, it means you no longer will be able to qualify for another loan for a long period. In fact, even small infractions like late mortgage payments will surface in your credit report, which in return can be a cause for banks and lenders to disqualify you.
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2 – Failure to lock your mortgage rate. The inability or failure to lock the interest rate on your mortgage is something you never should make. You don’t want to end up paying a mortgage with an interest rate gradually increasing. While you do have the option to lock or float, the important thing is you fully understand both of your options. 3 – You intend to apply for a mortgage with collections and charge offs. Remember that if you do this, more specifically on medical conditions on your credit report, there is a lot of room for error and it could ruin your application. The best thing you can do is review your credit report on a regular basis to make sure there will be no unnecessary concerns before you apply for a mortgage loan. 4 – You couldn’t figure out how much you can actually afford. A lot of people make the silly mistake of starting to look for a new house to purchase without realizing that many of their prospects have prices they can’t realistically afford. Hence, it is crucial that you get pre-approved first before even deciding to look for potential homes to purchase. The pre-qualification will be your basis on clearer view of how much you really can afford. You definitely don’t want to end up wasting your time and effort in searching for a home you never can get in the first place. In the end, you just have to be smart enough to avoid making those mistakes so as to make the mortgage a successful investment.