Common Mistakes People Make When Looking For A Mortgage
With a seemingly endless list of mortgage products to choose from, picking the right product is a task even for an experienced home buyer. Unfortunately, what confounds the mortgage obtaining task is opting to do so without the help of a professional.
There are multiple points of contention involved in the process of obtaining a mortgage and completing a home purchase and missing out on a single aspect could have repercussions on your dream of homeownership.
To help you steer clear of the many pitfalls that exist along the path to obtaining a mortgage and purchasing a house, Heidi Hamano of TMG- The Mortgage Group has put together a list of the most common mistakes people make when looking for a mortgage, and how to avoid them.
1. Focusing solely on the interest rate.
When obtaining a mortgage, clients tend to focus solely on acquiring it at the lowest interest rate possible. While it’s only sensible to look for a lower interest rate, you should not forget to look at the bigger picture. Before making a choice, thoroughly analyze your needs with regard to other parameters involved.
Ask yourself questions like, do I want a flexible payment term? What would complement my needs and repayment abilities more, a variable rate mortgage or a fixed rate mortgage? What are my future plans? Then take all of your answers into account before making a choice.
Or, you could hire a mortgage broker who will analyze your finances for you!
2. Having your Credit Report pulled multiple times.
When a client visits various financial institutions and asks for pre-approval, their credit score gets negatively affected as each time, their credit reports are pulled out for scrutiny by the lender. On the other hand, a mortgage specialist can use a single credit record and apply to multiple financial institutions on the client’s behalf.
3. Misconceptions about pre-approval.
Many people believe that a mortgage pre-approval guarantees the financing of any property that they wish to purchase. However, you must not rely on your pre-approval too much, because in case the property has some issues with its exterior, structure, soil or any other aspect, then there will likely be some challenges to get financing despite the pre-approval.
4. Lack of awareness about purchasing costs.
Apart from the downpayment and mortgage payments, there are other costs involved with a home purchase that clients are often not aware of; for example, property transfer tax and closing cost. Clients also have to verify the source of downpayment by providing bank records and money tracking records for three months because of the money laundry law. Clients who are unable to verify the source of the funds cannot use that portion of money towards their downpayment.
5. Not working with a professional.
People often don’t realize that working with a professional who can guide them through a whole process can make the purchasing experience a lot less stressful. Mortgage professional can provide unbiased advice at no cost whatsoever (on approved credit).
6. Renewing an existing mortgage without consulting a mortgage broker.
Before signing a renewing contract, it will be in your best interest to speak with a mortgage specialist to find out what your options are. They can help you decide whether to stay with a current bank, renew it under better conditions or consolidate existing debts at a much lower rate. As the services of a mortgage broker are free, why not take advantage?
To avoid these and other mistakes, reach out to the experts at TMG- The Mortgage Group.
I am Heidi Hamano, a mortgage specialist providing my services in Vancouver, BC. I am passionate about my work and committed to the needs of my customers. I offer a one-stop service for a wide range of mortgages; first home buyer mortgage, self-employed mortgage, refinance, investment property and other types of mortgage to clients across Vancouver, Burnaby, Richmond, Coquitlam, Port Coquitlam, Surrey, North Vancouver, Delta, and Langley, British Columbia.