- Posted by: steve
- Category: mortgage news
Looking at Mortgage companies in Florida? Buying a new home can be complicated. This article will cover common mortgage mistakes and how you can avoid them.
Getting a mortgage can seem intimidating. Most people can’t answer questions pertaining to the subject.
From finding the right lender out of many mortgage companies in Florida to knowing all the fees that go along with it, it’s a daunting process. There is lots to know before picking your dream house.
If you’re getting a headache already, know that we’re here to help you not only gain knowledge about mortgages but help you avoid ten common mistakes. Take a look!
Not Locking in Rates
Not taking advantage of locking in rates can cause you to pay a higher percentage. Rates go up and down all the time. Last week’s mortgage rate can be higher than this week’s.
Locking in your rate means you’ll be paying the same percentage for a certain amount of time. This will prevent you from paying a higher interest.
If you decide you need to extend your rate lock, some lenders will do so at an extra cost. The different mortgage companies in Florida will each have their own plans and terms.
Finding Surprises on Your Credit
We all know how important a good credit score is. If you haven’t been checking yours frequently or you know it’s not good and haven’t done anything to improve it, this could mean a more expensive loan.
Don’t wait until the day you apply for a mortgage to check your score. It’s best to know where it’s at six months to a year in advance. That gives you plenty of time to pay down any loans or debts that are impacting it heavily.
Remember that the amount of mortgage you’re trying to get will determine what number your credit score should be at. You can easily find this information out by using an online mortgage calculator.
Putting Your Eggs in One Basket
Just as you shop around when it comes to fancy electronics to find the best deal, you should consider this tactic when getting a mortgage. Don’t assume you’re getting the best because it’s the first mortgage company you go to.
Your rate will also depend on your current situation. Different lenders have different rates and types of mortgages. It may take a few days or months to narrow it down to a top choice.
The best way to go about it is to conduct research and ask the right questions.
You can ask, “What types of mortgages do you offer?” “Are there fees that come with the loan?” and “What is the interest rate?”
Not Seeing if You’re Pre-Approved
Unbeknownst to some, there’s a difference between being pre-approved and pre-qualified.
Pre-qualified means the lender looked at your income, debts and available finances. They then gave you the options for how much of a loan you qualify for.
Pre-approval requires more involvement from both you and the lender. You’ll have to fill out an application and pay the fees that come along with it. Then, they’ll take a look at your credit report and financial background.
If everything checks out good, you’ll get in writing the exact loan amount you’re eligible to receive.
Little or No Down Payment
What you think is saving you money at the initial start of buying your home could actually be hurting you. When you’re choosing the home of your dreams and you decide to go in below-asking price, which do you think the seller will pick: a larger down payment or a small one?
Right, the larger one.
Not only does it affect that part of the home buying process, it could also impact you when you’re trying to get a loan too. The larger the down payment, the less you’ll have to pay on the actual loan.
One thing to remember? Twenty percent is the ideal amount to put down. This increases your chance of getting a mortgage.
Not Knowing the Real Costs
Home buying is more than just shopping for loans from mortgage companies in Florida. It involves that, fees, insurance, and interest.
What seems like a good deal at first can quickly become a larger amount thanks to all those add-ons. Knowing all the rules and regulations in your area is vital.
States and even towns require residents to have certain ordinances. These serve to protect the house should anything happen.
For your area, do you know if you need flood insurance? How much are property taxes or HOA fees? These are all things to know before nailing down a mortgage.
Acquiring New Credit Cards
One easy way to get disqualified from getting a mortgage is to take out new lines of credit. If you think you can pay your way through application fees and other charges before and after the pre-qualification process, you’re wrong.
This will lower your credit score quickly and when you go back for your pre-approval, lenders will see it. They won’t take a chance on someone who opened new lines of credit and spent it all in one day.
They want candidates that know how to handle their finances and will ultimately make payments in full and on time. Making sure your financial background is in tip-top shape will help mortgage companies see this.
No Job Stability
It’s the same when it comes to your job. Lenders want people who have a stable job history because then they know you can keep paying on the loan.
If there are gaps or you went from job-to-job in a short amount of time, it can be hard to get approved. Job stability is essential for securing a mortgage.
Taking on Two Mortgages
We all get the itch to move once we’ve secured a mortgage, right? It’s hard to not think of buying a new home while you still have your current one.
This doesn’t really affect the mortgage process but it will up your stress levels. Worrying about having two houses is a recipe for disaster.
You should make sure your current house sells and that you can secure the one you’ve got your eye on. If the closing on one of them goes wrong, you can be without a home completely. Make sure this doesn’t happen by taking your time to properly close out your current house.
Or if you’re renting, you’ll want to tell the landlord of your move. This way you’ll get your safety deposit back and they can secure a new tenant before you leave.
Looking For a Mortgage Company Outside of Town
There are plenty of local options when it comes to mortgage companies in Florida.
Local companies can point you in the right direction in terms of buying a house. If you’re unsure of the lenders in your area, ask local real estate firms. They all work together to refer one another.
Use One of the Best Mortgage Companies in Florida
Avoid these common mistakes when it comes to buying a house. It’s an intense step-by-step process that can’t be completed in a day.
Feeling overwhelmed? Don’t worry, we’re here to help! We provide professional and reliable services to take the stress off.
Ready to get started? Get a free mortgage quote today!