The mortgage application process can be complex or difficult for many people, and that’s why a trusted mortgage broker like Altius Mortgage is so important. We’ve seen every situation possible in this industry, and our team is here to guide you through every step.
This means pointing you in the right direction in many areas, but it also means steering you away from the wrong direction. With that in mind, let’s look at a few of the most common mistakes we see people make before or during the mortgage approval process. Once you’ve finished here, you should have a good idea of a few of the biggest pitfalls to avoid.
In the majority of loan situations, your lender will require a 20 percent down payment. If you aren’t able to get this, though, you’ll be required to pay what’s called mortgage insurance: A protection for the lender against the possibility of you defaulting on payments. You pay these monthly insurance premiums, and they can often be very pricy – more pricy than the original down payment over the life of the loan, in many cases. Coming up with the lump sum up front can be difficult, but it’s worth the effort to avoid additional expenses.
You hear about APR on television commercials, but few people actually know what it means. APR refers to the final cost you’ll pay on a mortgage, including taxes and any lender fees. Some lenders will show you a pretty-looking number for your mortgage rates, but then hit you with a bunch of big fees in the paperwork fees. This is avoided if you’re demanding the APR cost.
Besides these kinds of fees, there are other costs you have to plan for. Things like maintenance, potential emergencies and general bits of upkeep will cost money, and we recommend that you keep at least 1 or 2 percent of your yearly budget set aside for these realities.
Credit score goes a long way to determining several major factors, including your interest rate. You should be checking this score well in advance of shopping for a loan – there are many free services online to do so.
Want to learn more about any part of the home loan process, or interested in scheduling a consultation? Speak to one of our brokers at Altius Mortgage today.