Mortgage consultant Surrey

 Mortgage Mistakes People Commit While Buying a House

Figuring out the financing is one of the crucial steps in the home buying process. Plenty of questions come to mind about mortgage as well as the mortgage process. However, some people overlook them due to the excitement of getting a dream house. It is important to note that the mortgage process could be daunting for first-time homebuyers. Especially, the ones who do not have an idea what to expect. 

Mortgage Mistakes Home Buyers Need to Avoid

While purchasing a house, it is crucial to be educated about the key aspects of a mortgage. Doing so would help you avoid costly mistakes. In case you are planning to purchase a house or in the market currently, consider avoiding the following mistakes

• Not Hiring Local Mortgage Company

One of the key mistakes that homebuyers make is not choosing the local mortgage company. It is important to understand that real estate markets are different. Using a company located in another state or city for quality service is not a good idea. In case you are not sure how to find the right mortgage consultant in Surrey, you could ask your real estate agent. The expert would provide you with the recommendations.

• Ignoring Credit Score & History

Credit score as well as history have a significant impact on the ability of buyers for obtaining a home loan and determining the mortgage rate. Overlooking both is a common mistake that home buyers commit. The buyers need to be aware of their credit score and history. Remember, for providing approval for the home loan, the lender would first review your credit report. 

Based on the kind of mortgage you are attempting to secure would determine the minimum credit score requirements. Moreover, every mortgage company has different guidelines (mortgage overlays) that could influence the credit score requirements. For instance, many mortgage companies need a minimum score of 640; however, some might allow 620, based on buyers’ circumstances. It is advised to be aware of your overall credit picture before you plan to buy a house. 

• Not Considering Fees Related to Getting a Mortgage

Not paying attention to the different fees that are associated with getting a loan is a big mistake that homebuyers make. It is worth noting that mortgage products as well as rates vary from one lender to another and the same goes with the fees of the lender.

Buyers need to ask the lender how much it would cost to get the mortgage through their company. It is advised to have such costs in writing so that you could make a comparison between the lending companies. You could also take the help of a reputed mortgage consultant in Surrey for making a wise decision.

• Not Getting Pre-Approval

Many people do not know the difference between mortgage pre-qualification and mortgage approval. Mortgage pre-qualification is an estimate of how much a borrower could afford. Mortgage lenders often issue this without doing much research based on the information provided by borrowers.

However, it is important to understand that a real agent would ask for the pre-approval, not the pre-qualification. Getting pre-approval is significant. It is issued by the lender only after reviewing the borrower’s credit reports, tax returns, pay stubs, and other crucial financial information. Therefore, before planning to view the house, consider getting a pre-approval. 

• Waiting to Buy Homeowners Insurance

Waiting to shop for insurance is one of the common mistakes. The homeowners financing the house purchase need to shop around for the homeowner’s insurance first in the mortgage and home buying process. No matter whether you are getting homeowner insurance for the first or fourth time, it is worth noting that the insurance rate could fluctuate. Waiting to shop for insurance could result in a delay in the closing. Therefore, ensure you do not do so. 

• Not Considering Total Cost of Owning a House

Owning a house is not simple as making payment of a monthly mortgage and then waiting until the next payment is due. It is important to understand that buying a house is associated with numerous costs. Before you make the mind of purchasing a house, it is crucial to know how much it costs.

The list of different costs associated with home purchase includes utilities, cost of potential repairs, and other expenses like auto insurance, groceries, etc. Buyers who do not consider the costs of owning a house often find themselves in a helpless position in long run. Especially, the ones who buy above their budget. 

• Adding Too Much Debt

One of the common reasons why buyers often get denied for mortgage post-pre-approval is due to a bunch of extra debt. Understand, adding extra debt before buying a house could mess up your debt-to-income ratio and result in denial of the mortgage.

Therefore, it is crucial to think thoroughly about mortgages before you take every step. For making wise decisions, consider consulting an experienced mortgage consultant in Surrey like Gurbir Sandhu. The expert could help you with the purchase and even refinance of the property. You could count on him for professional service.