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31 Common mortgage mistakes smart people avoid

Author: Jessica Bennet
Community Mentor
Ask Jessica
Posted on: 17th Oct, 2005 08:56pm
Obtaining a mortgage loan is not a very easy task. Rather it is a very intricate and time-taking process. Importantly it is a very significant move in your life.


It is often seen that out of the excitement of owning your dream home, you commit mistakes. You also make mistakes because of your ignorance on mortgage as well as because of the complexities involved in the mortgage process. Sometimes these wrong steps taken by you prove out to be very costly. You may have to incur huge losses and even may have to face the negative consequences of foreclosures.


You can make mistakes while taking out a fresh mortgage loan, while opting for a second mortgage loan and while refinancing your original mortgage loan. Take a look at 31 common mortgage mistakes in total.


12 Home-buying mistakes to avoid


Owning a home is a symbol of personal achievement and is very self-satisfying too. But it is not a cakewalk. In fact, your dream of owning a home can turn out to be your financial nightmare because of your wrong steps while making the purchase. Have a look at 12 common home-buying mistakes so as to shield yourself from these slip-ups.


10 Big second mortgage mistakes to stay away from


Once you have taken out a mortgage loan and have acquired some equity in your home, you may become complacent at the time of taking out a second mortgage loan. Have a look at these 10 second mortgage slippages so as to better equip yourself to cash in on your home equity.


9 Refinance Mistakes and how to avoid them


The allurement to enjoy better rate of interest may instigate you to plunge into refinancing. But your imprudence and hasty decision may put you into serious troubles too. Know about 9 common refinance mistakes so as to safeguard yourself while replacing your original loan with a new one with better terms.


If you however have proper knowledge about these common mortgage mistakes that many home buyers often make, it becomes comparatively easy for you to make the right mortgage move.
Posted on: 17th Oct, 2005 08:56 pm
when you go for a mortgage, you're making a big financial decision. and, you need to be smart enough to choose the right offer and know how it can help you financially.

it's not unusual if you can't make the right comparison, if you misjudge terms and conditions, or borrow more than you can afford. with a wide range of options available, it's a hard task to find the one that's best for you.

however, if you're aware of the mistakes many homeowners usually make, you won't take the wrong step. so, whether you're a first time buyer or one who's looking for a refinance or second mortgage, take a look at the common mistakes, which could otherwise cost you a lot of money:
loan amount depend on annual income after less expenses and ltv i think offering upto the EMI you can afford from your income ... and credit score must be high from 610 ... am i rite?
Posted on: 30th Nov, 2009 12:29 pm
Hi enoughdollars,

Your credit scores must be higher than 620, in order to get approved for a mortgage loan. Certain lenders do offer loans even though your credit score is less than 620. But they require higher down payment and the interest rate will also be higher than normal. The loan amount depends on your annual income and your debt to income ratio. You must earn enough to afford the monthly payments for the mortgage of your required amount. At the same time, you should not have too much of debt obligations to eat up your monthly income.
Posted on: 08th Dec, 2009 11:20 pm
Hello… good discussions… for most Americans… purchasing a house requires taking on a mortgage loan. a mortgage can be a very difficult and valuable financial investment and in order to pass up making common mortgage mistakes a borrower should be reasonably knowledgeable before committing to a contract…thanks :)
Posted on: 15th Feb, 2010 09:01 pm
about....you've been around long enough that it's time for your posts to begin to make some sense. the mindless platitudes need to cease and you should start providing advice or realistic opinions.
Posted on: 16th Feb, 2010 09:34 pm
A common mistake homeowners make when taking out a home loan is this. They often take out more than they can afford. A good rule of thumb if you have a double income household is to take out a mortgage as if were taking it out for only 1 of your 2 incomes. Average out the 2 incomes 1st, and use that average income amount, and keep your payments under 30% of that average gross income. It does 2 things, it protects your if one person looses their income, and it keeps your housing in income ratio well balanced as it should be.

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Posted on: 13th Mar, 2010 02:25 pm
Hi,

I'm in the processing of reviewing the benefits of refinancing my current mortgage and the common mistakes in refinancing link was very helpful. One item was whether or not I should get an appraisal of my home, before shopping around for refinancing options. What's the average cost for an appraisal?

What if your lender is independent and not a bank?

Thanks.
Posted on: 27th Apr, 2010 04:51 pm
Jason, you'll find all sorts of prices for appraisals. They're specific to location, they're specific to property type, and they're going to vary depending on the type of report you desire. Check your state directories to see if there's a grouping of appraisers. That question might get varied answers, but you'll get a better handling by asking them.

I suppose you're speaking of a mortgage lender when you said independent...they're all regulated by law...there are differences, but it's hard to capsulize in one short post.
Posted on: 27th Apr, 2010 07:09 pm
George,
Thanks for the information on appraisals. I'll check with my State directories to get a more accurate idea of on the pricing.
Posted on: 28th Apr, 2010 05:05 pm
It's a pleasure...you're welcome.
Posted on: 28th Apr, 2010 06:39 pm
Don't assume that because you got a trial loan modification that mean your mortgage was completely modified. If your don't do what you are suppose to do, you may find your trial loan modification was denied even after your approval. follow all the way through.

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Posted on: 01st Jun, 2010 05:09 pm
Here are some major mortage mistakes
1.Choosing the Wrong Mortgage
2.Letting Qualifying Ratios Get Out of Hand
3.Not Enough Down payment
we avoid these potential costly and/or disastrous mistakes by preparing yourself as best you can for the mortgage lending process.This can be done by carefully researching the types of mortgages available in your area.[/b][/list]
Posted on: 17th Jun, 2010 05:29 am
Learn to read your good faith estimate. Under the new Respa Regs, lenders cannot get away with the old bait and switch any longer. (You should receive a good faith estimate within 3 business days of making application) Under the new regs, there are certain lines with NO tolerance (Box 1 cannot increase from the good faith to final HUD) It can decrease but not increase.
Reading the Good faith estimate and your loan docs is extremely important. Don't be afraid to ask your loan officer questions.
Posted on: 19th Jul, 2010 07:33 pm
Thanks for these Good informations Caron
Posted on: 04th Sep, 2010 10:23 am
I heard I/O programs are difficult to qualify for since you not only have to qualify for P/I payments, but you also have to show 24 months worth of assets sitting in an account.
Posted on: 20th Sep, 2010 12:46 pm
Ya you are right that we should need to be smart enough to choose the right offer and know how it can help you financially.









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Posted on: 11th Oct, 2010 01:18 am
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