Mortgage sounds like a lot of processes, and a ton of paperwork. But mortgages don’t have to be scary. It's just the same as other business transactions.
To avoid mortgage mistakes, here are some of the things you can do:
1. Communicate with All Parties
This deal involves several people: the buyer, the seller, the realtors, and the lender. Keep everyone in the loop on every bit of information, or your closing could get delayed. Be transparent about everything.
2. Have Enough Money to Pay Closing Costs
Closing costs are usually 2-5% of the amount you’re borrowing. If you don’t have enough money, there are a few ways to work around the problem.
- Look for assistance programs that cover some of the closing costs.
- Call a relative and ask for a gift.
- Negotiate with the seller to pay the closing costs.
3. Unfreeze Your Credit
Buyers may have placed a security freeze on their credit, which restricts access to their reports. This can prevent identity thieves from opening new accounts in their name but can cause trouble when they’re applying for a mortgage. Head off problems as soon as you begin mortgage shopping.
4. Steer Clear of Big Purchases After Mortgage Pre-approval
Your lender will check your credit twice. First, when you apply for the mortgage, and next, days before you close on the house and get the keys. Even applying for a credit card or car loan can affect your mortgage rate. To get the information it needs, the lender will request your credit file from the credit bureaus.
5. Expand Your Employer's Contact Information
To prevent loan approval delays, get the emails and phone numbers for your employer.
6. Ask Questions So Your Lender and Agent Can Help
There are no dumb questions. Lenders and agents are there to help you, so pick their brains. For example, ask if there are home loan programs to help you get into a home and how to access them. See about getting the seller to pay closing costs. Check on anything you don't understand.
Taking these simple actions can keep your home loan application on track. And that means fewer hassles and less stress for you.
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