Top 5 Most Common Mortgage Mistakes
Every day, millions of people are looking for a house loan and they are struggling to find a suitable lender who can help them in their financial needs. You may think that mortgage is an easy thing to understand, but it is not.
If you are looking for a home loan, then you need to check out the following top five mistakes that you should avoid while applying for a mortgage.
1. Applying for the wrong type of mortgage
You need to choose the right type of mortgage that suits your financial needs. If you are looking for a fixed rate mortgage, then you need to consider the different types of loans like 15 year fixed, 20 year fixed, 25 year fixed and 30 year fixed mortgage. These types of mortgages offer different rates which will vary from 3.75% to 4.25%.
If you are looking for a variable rate mortgage then you can opt for 5/6 year fixed, 7/8 year fixed, 10/11 year fixed and 12/15 year fixed mortgage. These mortgages offer different rates, but if you are looking for a long term loan, then it is better to go for a fixed rate loan.
2. Choosing the wrong loan type
You must remember that there are many different types of loans available, so it is important to choose the right one. If you are looking for a home loan, then it is better to opt for an interest-only mortgage. This type of loan will help you to reduce your monthly payment, so it will help you to save money.
3. Not understanding your affordability
If you are thinking about buying a home, then it is better to check your affordability. You can calculate your monthly payment using the home loan calculator which will help you to understand the amount of money that you can pay per month.
4. Getting the wrong type of loan
You need to check the different types of loans before applying for a mortgage. If you have a low income, then it is better to go for a low down payment mortgage. In this case, you will need to pay less in the form of mortgage insurance.
5. Not having enough money for the down payment
It is better to have enough money in your account before applying for a mortgage. You can borrow up to 20% of the total value of the house. You need to keep in mind that the bank will charge you an extra fee if you borrow more than this amount.
Conclusion:
I hope you liked this post about “Top 5 Most Common Mortgage Mistakes”. I know some of you have already made these mistakes and now you are facing the consequences of them. So, avoid these mistakes while applying for a home loan and enjoy a stress-free life.
