Three Critical Mortgage Mistakes Common with First Home Owners

Mortgage in SandyIn their rush to secure mortgage loans, people often make fatal mistakes that end up costing them their homes. Owning a house is a bold financial step for many people. It amounts to the biggest expense on monthly budgets as well as the largest debt they have to carry for the rest of their life.

This calls for tact and careful decisions to make sure nobody would take advantage of the situation. Mortgage allows you to buy or build your dream home. Instead of letting this seemingly complicated process intimidate you, know what you can do to make the most of it.

In Utah, particularly in Sandy, mortgage providers say that many are prone to making the following costly mistakes:

Failing to Check Credit Reports and Score

Your credit score is an indicator of your creditworthiness and lenders have a particular interest in your financial history. A bad credit score (below 637 in Utah) means you are a risky client. A low credit score begets higher interest rates, and correcting mistakes improves your score. Upon knowing the state of your credit history, you can take steps to improve it.

Failing to Pre-qualify

Getting pre-qualified for a loan gives you a solid idea of how much the bank is willing to lend you. It offers insights into the monthly payments as well as the kind of house you can afford. Take note, though, that there is a difference between what banks offer and what you can comfortably afford.

Failing to Shop Around

Shopping around gets you the best rates on the market, which reduces the amount payable each month. Never settle for just one quotation and consult with other lenders. Low-interest rates mean you have more money left over each month. Have an expert explain to you between the different kinds of loans including ARM, Fixed, FHA or even jumbo loans.

Mortgage is a long-term financial decision that calls for proper planning. Avoiding these costly mistakes puts you on the path to successful homeownership.