Here are Mortgage Mistakes You Need to Know and Avoid – There is never a good debt, but mortgage can be used as a helpful solution. Of course, there will be several factors to consider and this isn’t simple. Once you miss calculation, you will make mistake. Often, this mistake will cost you thousands of dollars, and maybe debt for the rest of your life. Learn from these mistakes and avoid it.
• Spend Too Much for Buying Home
Ethically, lender will approve mortgage that takes only 35% of your monthly income. However, it is highly recommended to take only mortgage offer that requires only 28% of your income. It means whenever unpredicted emergency happens, you don’t lead yourself into a financial disaster.
• Not Enough Shopping for Rates and Types
When you buy a house, you will shop a lot to find a perfect one. However, you don’t do the same while shopping for mortgage rates. Do the same and shop a lot. Get multiple options within 30 days, and compare them.
• Fail to Check on Credit Score
If you make a late payment for one month, your credit score will be decreased. Meanwhile, you need to make on time payment for months before you can improve this score. While it affects on your mortgage approval, it will be necessary to check on your credit score first and fix it if necessary. Just as you check on you betting level before putting a bet, you need to make sure you are eligible for it.
• Making Wrong Changes in Your Credit
You may think that closing one of your current debts will increase your credit score, but it isn’t always. You need to consult to financial pro about this. Sometimes, it is better to put the money for bigger down payment instead. It is always wise to do as recommended by your financial experts.
• Skip the Inspection
The fundamental benefit of having a house inspection is that you will know when there is a serious issue or a huge damage. Skipping this process may cost you a lot later. Foundation repair can cost you up to $10,000 to the least. Imagine the need to spend this much of money during the early days of your purchasing.
Taking a house mortgage can be an answer to your current needs. However to make sure that you don’t face financial challenge later, you should consider avoiding those mistakes above. Good luck!