Many people make mistakes when buying a new home or refinancing their current home. Some mistakes are no big deal and can easily be fixed. However, some are mistakes are a big deal.
Here are some of the biggest mistakes potential buyers and homeowners make:
Mistake #1 - Over 90% of homeowners and buyers fail to examine their credit for any problems before the loan application process. Many people fail to realize that credit is a major factor when refinancing or acquiring a mortgage. Not reviewing your credit prior to the loan application process will only slow down the process.
There are several free online services (for instance www.freecreditreport.com) that will give you access to your credit score and report once a year. If you find you find your credit is in need of repair, you can simply write a letter to or call the credit card company or business that you have negative credit with and see if they will assist you in getting on the right track to having any scars removed from your credit. In the letter, you will need to explain why you were late with your payments. In most cases, the company will require you pay off the debt in full.
Mistake #2 - Many potential borrowers and homeowners fail to check how much a lender will loan them in advance. Many lenders, especially in today's real estate market, have strict guidelines for how much money they will lend. Typically, the lender's decision is based on the loan-to-value ratio. This means lenders have limits on how much money they will let you borrow based on the value of your home.
Here's an example: If you are refinancing your home, most lenders will not lend more than 90% of the appraised value of your home. If your home appraises for $100,000, you will be able to borrow $90,000. This is assuming your current loan balance and closing costs equal $90,000 or more.
Mistake #3 - Many homeowners and buyers fail to find an experienced mortgage lender to help them purchase or refinance a home. Associating yourself with high quality, honest, and service-oriented lenders is very important. Buying a new home or refinancing a home is an important decision and usually a large financial transaction. You don't want to treat it lightly. Dealing with the right lender can make the difference between having your loan application approved or rejected.
When choosing a lender, ask them a few basic questions. This will help you find the right one for your needs.
Some questions you may want to ask are:
· Can the lender provide any references? If they do, call them.
· How long have they been in business? Check them out on the Better Business Bureau.
· How and when can you get in touch with your lender if you need them? Your lender should be available to you through many ways; phone, fax, mobile, email.
Salt Lake City, Utah Real Estate
Salt Lake City, Utah Realtor® Kandy Clayton
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