Applying for a mortgage can be an exciting step; however, most aspiring homeowners have several questions about the process. When you want to buy a new home, it is essential to know about mortgage mistakes to avoid.
Mortgage lending in Sacramento from Anew Lending can help you navigate the mortgage process and help you avoid common mistakes.
1. Not Having Steady Employment
Having a steady job is vital when applying for a mortgage. Lenders want to see applicants that have at least two years at their job, as it shows you are more capable of handling a mortgage.
If you have an exciting new job offer on the table, consider waiting until the mortgage goes through.
2. Paying Off Debt
One of the lesser-known mortgage mistakes to avoid is paying off debt right before applying for a mortgage. Any changes in your payment history will reflect on your credit report and potentially lower your score.
Even if you have the funds to pay off old or current debt, it’s best to wait until you get the mortgage. To get a better idea of your credit standing, check your score from the major reporting bureaus at least six months before applying for a loan.
3. Not Using a Local Credit Union or Mortgage Company
Real estate is different in every state, so it is essential to use a local mortgage company. Local lenders understand the area better and can help you know which mortgage mistakes to avoid.
4. Putting Off Homeowners Insurance
Homeowner insurance rates can change just like any other lender rate. If you want to buy a home, you need to have a homeowners insurance policy for the financing process.
Although it can be tempting to wait until the last minute, it is essential to start shopping for homeowners insurance as soon as possible to find the best rate and policy coverage.
5. Assuming All Rates and Terms Are the Same
Not all mortgages are the same, and not all situations benefit from the same rates or terms. Sometimes, lenders roll property taxes into monthly mortgage bills, but be sure to go over these details with your lender.
VA loans and FHA loans have different terms and rates that are helpful for different types of aspiring homeowners. Asking your local mortgage lender the following questions can help you get a better idea of what works best for you:
- Which types of mortgages are available?
- What costs can I expect with your mortgage products?
- What are the different rates for the mortgage products?
Learn more about FHA loans and other mortgage products by contacting Anew Lending.
From knowing which mortgage mistakes to avoid to understanding the importance of debt to income ratio, Anew Lending can help you with the home buying process. Contact us today to get started in Sacramento, California.