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Mistakes to Avoid When Getting a Mortgage Loan Getting a mortgage has never been easier these days. Getting a new home or refinancing a current mortgage is as easy as getting a good credit score and preparing a down payment. However, making mistakes is likewise as easy as getting approved for a mortgage loan. In this article, let’s talk about those mistakes that could ruin your credit score, disqualify you from getting a loan, or simply make you regret your decision of getting a loan in the first place. The purpose of this post is to give you a heads up on what to avoid committing once it’s your turn to apply for a mortgage loan. 1 – Sweating it out to get a loan, only to end up filing for bankruptcy or foreclosure.
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It’s kind of surprising really to know that some people don’t really care about getting bankrupt or having their property foreclosed. What you don’t realize is that if you end up on either of those scenarios, it means you no longer will be able to qualify for another loan for a long period. The fact is even minor faults or infractions like getting late mortgage payments from time to time will be more than enough reason for banks and lenders to disqualify you.
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2 – Inability to lock in your mortgage rate. You never can afford to forget to lock the interest rate on your mortgage. You don’t want to end up paying a mortgage with an interest rate gradually increasing. Yes, it may be true that everyone has the option to lock or float, but it doesn’t deny the fact that you need to particularly understand the benefits of both options. 3 – You intend to apply for a mortgage with collections and charge offs. If you do this, there could be repercussions on your application later on. For you to avoid this, you have to conduct regular reviews on your credit report to make sure there will be no unnecessary surprises later on. 4 – You couldn’t figure out how much you can actually afford. There have been so many instances in which people made the silly mistake of searching for prospective homes to buy, not realizing that most of those they look at have price tags they can’t really afford. Hence, it is crucial that you get pre-approved first before even deciding to look for potential homes to purchase. With the pre-qualification, you have a better understanding of how much you can actually afford. You don’t want to end up wasting tons of effort and time in finding a home and realizing you never will be able to get it. So, to make sure your mortgage loan will be a successful investment, avoid making those basic mistakes we just talked about.