You’ve heard it all before; buying a house is the biggest investment that you’ll ever make. This statement is usually followed by tips on what to look for in a house, how to get it assessed and how to choose a good neighbourhood. All of which is very important, but what about tips on how not to mess up your mortgage? You’d be surprised at the number of ways in which your mortgage can go wrong, from unwittingly locking yourself into high interest rates to scuppering your approval chances before you even begin your search.

Here are four common mistakes people make when applying for mortgages – and how to avoid them:

1)     Job-hopping

Our grandparents and parents might recoil in horror at the frequency with which we now change our jobs, but job-hopping is the norm these days. Unfortunately, while society deems it perfectly acceptable, lenders do not. They like to see a little stability before they put hundreds of thousands of dollars at risk. According to MSN Real Estate, lenders will consider you a bigger risk if you swop your industry for another (for example, if you go from mining engineering to freelance graphic design), than if you simply change companies. However, even this simple move is best deferred until all the documents have been signed, sealed and delivered.

2)     Skipping the pre-approval process

Pre-approval is not a guarantee that you will get a mortgage; but it does significantly improve your chances. Pre-approval is better than pre-qualification because your finances are vetted more thoroughly (Mike Sheridan – realtor.com). Pre-approval considers your credit record, employment history, debt, and assets. If you don’t meet pre-approval requirements you can bet that you won’t meet mortgage approval requirements. If you are pre-approved, you are also more likely to close a sale because sellers will know that you’re not just wasting their time and that the chances of you not qualifying for finance are slim.

3)     Going with the first lender that comes your way

You wouldn’t buy the very first house you see without comparing it to several others, would you? So why would you choose the first lender you visit without comparing it against others? While lenders have to operate within certain regulations, their services still differ widely. You should visit three to five lenders and get quotes so that you can compare everything from interest rates to closing costs.

4)     Not locking in your mortgage rate

Mortgage rates fluctuate on a daily base; a favourable rate today might rise to an unfavourable rate tomorrow. You can wait about and gamble on locking in at the right time, but if you dither long enough you risk losing everything.

In an article for Fox Business, Kayleigh Kulp cites mortgage expert Polyana da Costa, who says that different lenders have different relock policies, which is another reason you need to shop around before you commit. Basically, the favourability of your rate could depend on you choosing the right lender.

Buying a home certainly is a major financial commitment, so it makes sense to do all that you can to ensure that you get the best financing possible. This requires research on your part, and perhaps a little advice from a home loan expert.

Sandy Cosser writes for a South African-based personal financial services provider that specialises in home loans, pre-approvals, bond calculators and second bonds.

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Selecting a house is already a daunting task, but finding the finances to buy the house you want can lead to additional stress. As a first-time homebuyer, you need to know the important elements involved in buying a house, such as acquiring financial assistance. As you may already know, buying a house is a huge and expensive investment. For this reason, you will need the assistance of a lender to finance such investment- unless you can pay the full price of the house upfront.

With that said, you need to acquire a mortgage loan from a trusted mortgage provider. Choosing a mortgage is the first step towards owning the house you’ve always wanted. This process can become frustrating and stressful, especially if you are not well prepared. To help you understand what happens when you apply for a mortgage loan, here is a four-step guide to help you with your application.

Step 1: Examine Your Finances

You must first come up with a good estimate of how much mortgage you can afford. There are a number of lenders who are very eager to make your home application very enticing to help you qualify for a higher mortgage rate. Unfortunately, they might offer you a deal that is more than what you can afford. For this reason, it is best to have a budget.

You can come up with your budget by evaluating your income, expenses, and your monthly payments. After subtracting your expenses and monthly payments from your income, the amount left is how much mortgage you are capable of paying every month. Aside from the monthly mortgage, you must also take into account other expenses, such as insurance, taxes, and homeowner association dues.

Step 2: Correct And Improve Your Credit Score

Your credit score is one of the factors that a lender must evaluate. A high credit score will allow you to borrow money at a lower mortgage rate. To help you achieve a good deal, you must check your credit score. You can do this by getting your full credit report.

If your credit score is low, you must take the time to correct it. For instance, you can spend a couple of months paying your debts on time. You must also check for any errors or inaccuracies in your credit report. If you found any errors, you must immediately make the necessary corrections. Remember that you cannot immediately achieve a high credit score overnight; thus, you must take your time and exert your effort in preparing your credit score.

Step 3: Shop For A Loan

After you have done the first two steps, it is time to shop for a loan. You can look into the mortgage rates offered by banks, mortgage brokers, and online mortgage providers.

• Banks: They offer a traditional form of mortgage funding. They are also more trustworthy and reliable since banks have recognizable brand names, and their fees are very competitive against lenders. Unfortunately, some banks lack a broad range of loan programs, which may translate to higher interest rates and fees.
• Mortgage brokers: They can offer a wide variety of loans; thus, they can tender low interest rates. Additionally, individuals with a not-so-impressive credit rating can still apply. The downside is that mortgage brokers are usually more expensive than other funding options.
• Online mortgage providers: This mortgage option also offers a wide variety of loans. The biggest disadvantage is that they do not offer face-to-face services.

Step 4: Loan Application

Applying for a loan is one of the easiest procedures, especially if you have gathered all the necessary financial documents to prove your claims. You must first fill out an application form with a loan officer. The application form might ask the following details:

• Name
• Social Security Number
• Birth Date
• Present address and address history
• Details of current employment and employment history
• Income, Assets, and Liabilities

After filling out the application form, the loan officer will then run your credit report and check your FICO scores. Additionally, you need to provide proof and other documents, such as paycheck stubs, bank account, tax returns, and investment earnings reports. If the loan officer believes that you are capable of paying the mortgage loan, they will employ a professional appraiser to ensure that the value of the home you want to buy is worth the purchase price.

Contributed by : Hayden Homes is a reputable home building company that offers their readers simple tips and advice on how to get a mortgage loan.

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One of the best things that people hope for in their lives is to finally own a home of their own. Very few people have the privilege of buying a home and making all the payments at once. Since many people cannot afford this option, people opt to get a mortgage.

The best way to get a mortgage is actually doing so via a mortgage specialist. A mortgage specialist will help you get the right type of mortgage that will fit your needs and assist you to acquire that house you have always wanted.

Who is a Mortgage Specialist?

A mortgage specialist is a person who has specialized in mortgages and can sometimes act as a liaison between you and the lender. The advice that they can give you is very valuable and comes in handy when it comes down to choosing the right type of mortgage to get.

Why should you get advice from a mortgage specialist?

• You can get the information by yourself but chances are that you will not be able to get a very good deal on your own because you do not have sufficient knowledge in the area of mortgages. They are experienced and so they know the mortgage industry in and out so they are able to give you sound advice about mortgages of all shapes and sizes.
• The second reason why you should take the advice of a mortgage specialist is because today you are faced with a lot of information which can easily misguide you when you are choosing your lender.
• The third reason is because you will be getting the information about mortgages for free. You will get the advice for free because the mortgage specialists can only get paid a commission when they have made a client sign a loan from a lender.
• Many people have poor credit scores and so when they apply for a mortgage, they are forced to pay higher interest rates than the people with good credit scores. The mortgage specialist can assist you to get lower rates from a lender than you would if you tried to do it yourself directly to the lender.
• The fourth reason is so that you can have someone do most of the legwork in terms of the negotiating and paperwork that needs to be done. They do the hard work for you so you do not have to go through it. The mortgage specialist will also become the point of contact regarding all the things that are related to your financing.

Other advantages of a mortgage specialist

You will save yourself a lot of time when you get the advice directly from a mortgage specialist. This is because all the time that you would have spent doing research online can be spent on other things related to the mortgage, all because you decided to get accurate information from your mortgage specialist.

If you are ever faced by a situation where you need to refinance your mortgage, the mortgage specialist will give the right advice and direct you in getting your mortgage refinanced the right way.

The amount of convenience that you will find from getting advice from a mortgage specialist is incomparable to the hassle that you would have to go through if you are going to gather the information for yourself from scratch. Another major advantage is that the mortgage specialist is always aware of new deals and changes in the industry so you can benefit from the most current information about mortgages.

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When selecting the right loan for your situation, it’s necessary to look at a range of different factors; these range from the types of loans that are generally available, through to the importance of understanding interest rates and your how much your credit score determines what you can borrow. It’s also important to think about what the loan is for, and what options there are if you have bad credit.

Types of Loans

Loans can be divided into several broad categories, which include secured and unsecured loans. A secured loan is generally taken out against something valuable that you own, whether that be a piece of property, a car, or jewellery. The lender can choose to repossess an asset or sell it in order to pay off the loan. Secured loans do produce low interest rates and longer contract terms than unsecured loans, but with a higher risk of losing valuable assets.

Unsecured loans, then, represent forms of credit that don’t use assets, but are instead valued through their rates of interest – this might include a personal loan from a bank, a credit card, or an emergency or payday loan – these loans are worth considering if you need money quickly, and if you can take out a loan off the back of a positive credit score.

Interest Rates and Your Credit Score

How much you can stand to borrow and repay on a loan will depend on interest rates and your credit score. The base rate of interest is set by the Bank of England in the UK, and is currently at 0.5 per cent – most lenders will charge above this for loans, although mortgages can be taken out to match the base rate. In terms of an average loan, you can might pay 5.2 per cent on a £3,000 payment, with 1 year to repay – this 5.2 per cent interest will mean you repay around £230 a month to cover the loan.

Credit card interest rates are also variable, and can go from very low introductory offers to about 18.9 per cent and higher in interest charges per year. Payday loans, which are easy to apply for, but come with the understanding that you make a full repayment with interest at the end of a month, can charge up to 1400 per cent in interest for their quick lending.

The kind of interest rate you have to pay will primarily depend on your credit score, which is worked out through your past borrowing history, as well as through your employment and address history. A negative credit score can result from defaulting on loans, and from consistent periods of time away from work; this can make it difficult to get credit, and can mean that you have to work to rebuild your score with credit agencies such as Equifax, Callcredit, and Experian.

What the Loan is For

Whatever loan you need, remember to consider how much risk you’re willing to enter into – what is the purpose of the loan, and can you realistically expect to make repayments with interest within a given contract? Also, think about what kind of collateral, or assets, that you can afford to gamble with. If you do have bad credit, it’s similarly worth considering approaches that lower your personal risk – getting a loan with a guarantor can be useful, as they agree to make payments on your behalf if you are having problems. Borrowing against the equity in your home can also represent a calculated risk if you need to raise a significant amount of money in a short period of time.

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Buying a property is a huge decision. Whether it’s a matter of finding a solid place for investment or simply looking for that dream house to turn into a home, chances are that buying in bricks and mortar will be one of the most important financial decisions of your life. No pressure.

To help, here are five things that you might want to consider before you sign your life away.

1) Planning ahead

Walk through the house and try and imagine yourself, or your family, or potential tenants, living there. Does the floor plan work? Are master bedrooms within easy reach of kids’ bedrooms, or will toddlers have to navigate a set of stairs to find their parents in the night? Will entertaining be a seamless task, or do guests have to pass through the laundry to get to the deck? A little bit of imagination will help you discern whether a real person or family (not just the hypothetical one the architect had in mind) could live there.

2) Security is key

You’re either going to be living in this property yourself, or charging a fee to give someone else the privilege; security is a must. If it’s an apartment, ask about security in the lobby; is there staff you can contact overnight? Have there been any robberies in the building? Freestanding houses bring their own set of issues. Side lanes can make it easy for an intruder to enter through to the backyard. Ask the real estate agent these questions.

3) Inspect the aspect

‘Aspect’ is basically just realtor jargon for ‘the way that this building faces.’ No, nobody really understands why they call it that. In cities like Sydney, a house with a north/north-easterly aspect will be cool in summer and warm in winter.

4) Money doesn’t grow on trees

Sometimes price is the factor that makes you keep your mouth shut during an auction. If you want to know whether stretching yourself a little financially is worth it, look at growth trends for the suburb. Is this suburb just coming into its prime? Or is it really yesterday’s news? If the suburb you’re buying in has slowing growth, but one’s around it seem to be just picking up, why not broaden your search? Better to pick a fruit just before it turns ripe than after it’s started to go brown.

5) Very superstitious…

Finally, particularly for potential landlords, you should think about any superstitions that could be surrounding the property. But this means more than just sussing out whether or not it is a deceased estate. For example, it is a common belief within Chinese culture that the number 4 is unlucky, so that could be a deterrent for potential tenants. Luckily, this is something that can easily be averted; have you ever wondered why so many apartment blocks go straight from 2A to 6?

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