Heinous Mortgage Mistakes

Homeowners make a variety of costly mistakes when it comes to mortgages. Here is all you need to know to avoid these mistakes.

Any homeowner regardless of their credit, needs to avoid making financial mistakes when it comes to their mortgage. If you are in the process of taking out a mortgage you need to research lenders and do your homework to avoid common mistakes.

Here is a checklist to help you avoid costly mistakes when taking out a mortgage.



Does The Mortgage Have a Prepayment Penalty?

This is one of the first things you should look for when evaluating mortgage offers. Prepayment penalties are a fee you will have to pay if you refinance or sell your home. This expense can be as high as six months worth of interest on 85 percent of the original loan value. This expense defeats the purpose of refinancing; any potential savings from refinancing will be lost to the penalty.

This is especially undesirable if you had to take out a mortgage with a high interest rate or unfavorable terms due to your credit.



After six months to a year of a bad credit mortgage you will want to refinance to a traditional mortgage with better rates and conditions; avoiding a prepayment penalty will save you money.

What is the Exact Interest Rate?

Getting the lender to commit to an interest rate can be harder than it sounds. Make sure you get the exact interest rate in writing. Make sure it is not a "Discount Rate" or an "Introductory Offer." Make sure the lender or broker will lock this mortgage rate and give you enough time to close on the loan.



Negotiate with your lender for a lower interest rate; you might offer to prepay points in exchange for a better rate or more favorable terms.

Is Your Lender Pushy?

Do not be a victim of pressure sales tactics. If you feel your lender or broker is being pushy, look elsewhere. Mortgage lenders that practice pressure sales are more likely to practice predatory lending practices as well. To avoid being taken advantage of you should look for your mortgage somewhere else.



Know Your Budget Before You Shop

Many homeowners rush their financing to avoid losing their dream home. The are happy enough just being approved that they take a mortgage with unfavorable terms and rates. You can avoid falling into this trap by doing your homework first and having a budget. Do not plan on having lower payments in 2-3 years; you need to budget for today, especially if your financing falls through 2 or 3 years down the road.

To learn more about avoiding common homeowner mistakes sign up for our free mortgage guidebook.



St Louis Mortgage Refinance

Louie Latour has twenty years of experience in the mortgage industry as a mortgage broker.

He is the owner of Mortgages Refinance Advisor, a mortgage help site devoted to saving homeowners money with a free guidebook Mortgage Refinance: What You Need to Know. Sign up for your free guide today at: http://www.refiadvisor.com

How to Shop for the Best Mortgage Loan

Shopping for a mortgage loan can be overwhelming. Whether you are purchasing a new home, refinancing your existing mortgage, taking out a 2nd mortgage, or applying for a home equity loan, you need to do your homework first.

When comparison shopping for a mortgage loan you need to collect information from a variety of lenders including interest rates, annual percentage rates, terms, and lender fees. Ask your mortgage lender or broker for a detailed list of these items for each loan you are considering.



You can easily locate this information on the Internet without going through a third party.

Compare mortgage loans of equal term lengths. It does not make sense comparing a 15 year mortgage to a 30 year mortgage unless you want to see the difference in your monthly payment amount. Look at the interest rates: does the mortgage come with fixed rates or adjustable interest rates? What is the term length of the mortgage? Will you be required to pay points up from to qualify for the loan? Are you going to be required to purchase Private Mortgage Insurance?

One of the items the lender should provide you is the Annual Percentage Rate for each loan offer.



This figure factors in all fees and expenses for the loan and is a helpful way to compare the cost of borrowing from one mortgage lender to the next.

In addition to interest rate you should look at fees. Mortgages that do not have prepayment penalties are better offers than those that do. Mortgage lenders that require Private Mortgage Insurance should be avoided as this could add hundreds of dollars to your monthly payment amount.



Other favorable terms to look for are loans that do not require escrow for taxes and insurance. Good escrow companies are difficult to find and selecting a lender that does not require escrow could save you a lot of aggravation and headaches.

As you can see a good mortgage offer contains much more than favorable interest rates.

To learn more about spotting a good mortgage offer when you see one, sign up for a free mortgage help guide. It is helpful to learn mortgage terminology and how the mortgage industry works prior to shopping for a mortgage loan.



If you skip this important step, how will you recognize a good deal when you find it?

Louie Latour has twenty years of experience in the mortgage industry as a mortgage broker.

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He is the owner of Mortgages Refinance Advisor, a mortgage help site devoted to saving homeowners money with a free guidebook Mortgage Refinance: What You Need to Know.

Sign up for your free guide today at: http://www.



refiadvisor.com