Mistakes to Avoid When Searching for a Mortgage
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If you are ready to get your foot on the first rung of the property ladder, you will have to negotiate the seemingly complicated process of finding a mortgage.
With so many home loan packages out there, it is easy to settle for one that doesn’t really meet your needs.
In order to help you with your home loan selection, here are a few of the common pitfalls that you should avoid in your quest for a mortgage that works for you.
- Not Using an Independent Mortgage Broker – If you approach a single lender, they will try to sell you their package, while an independent mortgage broker has a working relationship with many different lenders, and can therefore tailor the loan to best meet your needs. Choosing a Sydney mortgage broker with award winning service will result in finding a home loan that suits you in every respect, and what’s more, the independent broker’s services are completely free to the borrower, as they receive a small remuneration from the lender.
- Not Getting Mortgage Preapproval – Nothing is certain in the dynamic world of home loans. If you start house hunting without mortgage preapproval, you could be wasting your time. Indeed, most sellers will not take you seriously until you have mortgage preapproval, mainly because any offer you might make is subject to mortgage approval. Once you have that preapproval, you can move ahead with some confidence, as the lender has already reviewed your status, and based upon that, they are prepared to accept your mortgage application.
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- Trying to Pay the Minimum Deposit – It might seem like a good idea at the time, but looking for a mortgage that allows you to pay a minimum deposit will cost you more in the long run. Of course, there are many expenses when purchasing real estate, and you do need to crunch the numbers before making any decisions. If you don’t have enough for a deposit, it is better to wait a while and keep saving.
- Failure to Improve your Credit Score – As you probably know, any lender will have access to your credit history, and your credit score will have a bearing on their decision. If, for example, you have a couple of small outstanding debts, you are advised to clear them before applying for a mortgage, as this will greatly improve your chances of success.
- Failing to Understand the Expenses Involved in Real Estate Purchase – When you buy a home, there are many expenses involved; stamp duty, legal fees, and when you move in, you will need to put something by for furniture, fixtures, and fittings. It is imperative that you sit down and make a list of all the costs you will incur, otherwise you might make a commitment that you cannot complete.
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Providing you take all of the above into account and crunch the numbers, your purchase should be a wise investment. As time passes, you will build up some equity.
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Category: Housing
