Taking out a Mortgage is one of the most important decisions you’ll make in your life. Be sure you understand what you’re getting into and following the following tips. Listed below are some tips to avoid Mortgage pitfalls.

Don’t Misrepresent Your Income

Be honest with the lender regarding you annual income. Also, be sure you get no-obligation quotes in order to protect your credit from too many queries which ultimately lower your score. If you are pre-approved when you misrepresent your income, you could easily get rejected once the lender finds out the truth.

Don’t Let Your Credit Dictate the Terms of the Mortgage

If you have bad credit score, lenders may try to take advantage of your situation by offering you a mortgage at exorbitant rates. Don’t fall into this trap. Shop around as there are upfront mortgage brokers who can provide you with a reasonable rate, even if your credit is not great. Be resourceful and shop around.

Avoid the Hard Sell

Never deal with a mortgage brokers who are pushy or try to give you the hard sell. Likewise, if the broker seems to be promising you too much, be careful. Taking on Mortgage Loans with unfavorable terms may end up costing you thousands of dollars in the long-term, so carefully gauge your ability to pay off the loan comfortably before you take on that responsibility.

Be Prepared and Do Your Homework

Do your research and make sure you compare several mortgage offers. The best way to avoid pitfalls is to be prepared and by educating yourself.

Avoid Business with Lenders who Fund their Loans through a Single Investor

Mortgage brokers should have a diversified pool of investors. If the Broker has a unique source of funding, it’s quite possible that they’ll have a limited range of products to offer you. When it comes to mortgages, every borrower is unique. Ask about the mortgage broker’s investors and also inquire about the variety of their products.



Not Using Common Sense

Be sure to pay your existing debt engagements on time. That means being extremely diligent about paying your credit cards, particularly in the last year. If you need to wait a year to build up your credit before taking on a burdensome loan, that may be a good idea. Don’t carry other forms of debt simultaneously that you can’t afford, such as car loans or high credit card bills. Certainly don’t make any outrageously high credit card purchases directly before you apply for the mortgage.

Be Careful About Adjustible Rate Mortgages or ARMs

Adjustable Rate Mortgages are often difficult to understand. Fundamentally though, it’s a home loan where the interest can vary. The lender will adjust the monthly rate according to some index plus their markup. The problem is that sometimes these types of loans can grow over time, and this is called negative amortization.

The above are just some of the ways you can avoid mortgage pitfalls. Don’t panic and take your time shopping for the loan that best fits your specific needs. There are honest brokers out there that can help. Fill out our free contact form, and one of our legal representatives will call you promptly.