Common Mistakes People Make When Obtaining a Mortgage
For most people, the dream of homeownership becomes a reality with the help of a mortgage. As one of the most used financial tools, mortgage products have a range of terms and rates that are variable or fixed. However, with multiple products to sieve through and lenders to deal with, clients can get overwhelmed and end up making errors that they live to regret.
At Capri Mortgage Corporation, we understand how challenging selecting a mortgage product can be. To ensure you steer clear of the many costly errors people commit, and enjoy the mortgage and home buying process, we have compiled a list of the most common mistakes people make when getting a mortgage.
1. Choosing the cheapest interest rate.
A number of borrowers fall into the trap of selecting a mortgage with the lowest interest rate. However, there are several other factors like terms of payment, duration, pre-payment, penalties, and other factors that make a mortgage product ideal for you. It’s best if you consider all the elements that are associated with a specific mortgage product and not chase a low-interest rate.
2. Not shopping around.
When obtaining a mortgage, you have to go to multiple lenders and figure out who is offering a product that matches your requirements. A mortgage is a long term financial obligation, so picking the first mortgage from the first lender you meet could be a decision you regret. It’s best to speak to a few lenders and understand how much of a mortgage you can afford and what terms best suit you.
3. Not rounding up your mortgage payment.
Rounding up your mortgage payment can save you a considerable sum of money in the long run. For example, if your monthly mortgage payment is $815, by increasing it to $1,000, you could pay your loan a lot faster. However, it’s important to understand your financial limitations and how much you can round up your payment to the next dollar before proceeding.
4. Not being careful while choosing the right lender.
There are all kinds of lenders in the mortgage sector, and some of them have unfair terms and conditions for borrowers. Before you sign up for a mortgage, it is essential that you read all the terms and conditions and speak to past clients about their experiences with a specific lender.
5. Getting into a vehicle payment before you apply for a mortgage.
Often, people don’t realize that a mortgage is a long-term loan and lenders are concerned about a client’s creditworthiness from a long-term perspective. Purchasing a vehicle or a bunch of furniture items just before you apply for a mortgage has a negative impact on your credit scores. It may also weaken your financial position in the eyes of a lender, and they may refuse to give you a mortgage. Not being diligent in managing or taking care of your credit could also have an impact on your creditworthiness in regard to obtaining a mortgage.
For the best mortgage services in British Columbia, reach out to the experts at Capri Mortgage Corporation. For over four decades, we have been providing mortgage solutions for residential and commercial properties and have become one of the best private equity lenders in British Columbia. We have a vast network of institutional and private sector lenders, which allows us to provide the best rates and options to our clients.