Mistakes to Avoid When Applying For a Home Mortgage

Applying for a home mortgage goes well beyond filling out a few
forms and awaiting approval for a conventional or jumbo loan.
There are mistakes you must avoid when applying for a home
mortgage and any one of the ten listed can wreak much havoc, even
scuttle the loan. Let’s take a look at potential mistakes and
how you must avoid them to ensure that your mortgage is approved
without a hitch.

1. Getting prequalified, but not pre-approved for a home
mortgage. No matter whether you are seeking a home that will be
conventionally financed or one requiring a jumbo loan, getting
prequalified by a realtor is a waste of everyone’s time, while
getting pre-approved by a Texas mortgage broker is many times
better. Prequalification really does nothing, while pre-approval
means that you have a loan in hand. Better yet: get pre-approved
and have a letter of approval with you when shopping for a home.

2. Letting credit problems continue unabated. Did you know that
you could get free copies of your credit report from each of the
three major credit-reporting bureaus? That’s right, on an annual
basis you can get one free report each from Experian, Equifax,
and Trans Union and find out what is on your credit report. If
there are errors or things that need improvement, you can address
these problems ahead of time. For approximately $5 - $7 you can
get your credit score too. The higher your score, the lower home
mortgage interest rate will be. You could save hundreds of
dollars per year with this little bit of extra knowledge.

3. Too much house, too little money. Perhaps you could get
approved for a more expensive home, yet after calculating all of
the other expenses in life, you learn that you will be stretching
making monthly Texas mortgage payments. Don’t jeopardize your
future; if you cannot repay your conventional or jumbo loan, your
home could be repossessed. Instead, purchase a home within your
means.

4. No rate lock for your conventional or jumbo loan. As Texas
mortgage rates rise, you can be assured of a low, fixed rate if
you lock in the rate. Imagine getting a great rate only to see it
get kicked up a half of a percentage point before you close,
costing you hundreds of dollars extra per year! The higher rate
could even cost you your loan.

5. Excessive closing fees. You may be able to afford monthly
Texas mortgage payments, but can you afford the closing fees? If
you aren’t careful, you could pay thousands of dollars in extra
fees before your home mortgage closes. Get a good faith estimate
to find out the fees in advance of your closing.

6. No residual funds leftover. After buying a home, do you have
enough money on hand to pay for maintenance costs? Utility bills?
Other unforeseen expenses? With no cash on hand, you could soon
see yourself running up big credit card fees to pay for
expenses.

7. Not using a professional inspector. In some jurisdictions,
using a home inspector isn’t required. While tempting to not
rely upon the services of a trained professional, you may miss an
important structural problem and have little or no recourse at
closing. Ultimately, by not using a professional inspector it
could be one of the costliest mistakes that you make.

8. Waiting on home insurance. Before you can close on your home,
you must have a home insurance policy in place. Don’t wait until
the last minute to get insurance as you could run into delays
that may push back the closing date of your home.

9. Signing documents without reading them. Don’t assume that the
verbal agreements you made are the same as the written agreement
you sign. If a problem arises, the written agreement will trump
the verbal agreement, no matter how well intentioned either of
the parties may have been.

10. Relying on a set closing date. Life happens and closing dates
can shift. If you are renting and seeking to move on the same day
that your home mortgage close, you could find yourself homeless
if the closing date shifts. Build in a buffer of several days to
a week to protect yourself.

There are other deadly mistakes that can occur after you have
already moved into your home. Chief amongst them is bad mortgage
refinancing where owners leap for a lower rate without
calculating the closing costs. You may find yourself eligible for
mortgage refinancing but learn too late that with all of the
closing costs added in, your savings could be wiped out. Better
to make certain that your mortgage refinancing plans are checked
by an accountant specializing in mortgage refinancing options
before agreeing to a new loan.

If you are looking for additional articles on mortgage and real
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http://groups.yahoo.com/group/Free-Reprint-Articles for the best
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Ray Burton is a personal training business owner, online writer and growing net entrepreneur. He is also the author of the controversial workout e-book, The Fat 2 Fit Program which is also part of his passive income sources along with the membership site FitterFast.com.

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