Getting a mortgage is always a daunting task, even if you’ve done it many times before. It is even more so when it is your first time. What’s worse is that when it is your first time getting a mortgage you will receive tons of advice from good intentioned people. But no matter how good their intentions are, their advice can be dead wrong. Compare the advice you’ve heard from friends and family to this list. If it’s on this bad advice list from Realtor.com then don’t listen to it. These are worst bits of advice new buyers actually believe:
- “Don’t bother getting pre-approved for a mortgage.”
This ia bad advice because pre-approval could really help avoid a lot of issues down the road. While pre-approval doesn’t seem “official” for our finances, it can help you get the upper hand if there are several offers on a property you want!
- “Get your mortgage from the bank where you already have an account.”
Even though this might be the most convenient option, it may not be the wisest. You need to shop around for your loan in the same manner that you shop around for the perfect home. Try to find the place that has the best customer service, the easiest application process, terms that work best for you, and competitive rates!
- “Don’t bother reading the fine print.”
This one is so obviously bad advice but it, sadly, still needs to be addressed because people still ignore the fine print. If you don’t read those tiny important clauses, they could end up costing you a lot of money. Read all the documents very carefully and closely.
- “Always go with the lowest interest rates.”
This one actually sounds wise and practical; however, the lowest interest rates around can sometimes have serious strings attached. Very low interest rates are usually found in adjustable-rate mortgages which can be tricky. If rates go down, then you could get a sweeter end of the deal but if you get an adjustable-rate when rates are low then a sudden rate increase could result in a significant payment shock.
- “Borrow as much as you’re approved for, even if you don’t need it.”
You should always strive to live slightly below your means because you never know what financial surprises are around the corner. If that’s true, then why set yourself up for a higher mortgage than necessary? You are simply asking for financial heartache. Make a budget to determine what monthly payment you would be comfortable with and don’t stray off of that.
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