February 11, 2011

10 Mortgage Mistakes to Avoid

U.S. News ran an article 10 Major Mortgage Mistakes to Avoid via Yahoo.

Here is their list:

1. Not checking your credit
2. Applying for new credit alongside the mortgage
3. Failing to look at the total housing payment
4. Not seasoning your assets
5. Job hopping
6. Not getting pre-approved
7. Not shopping around
8. Chasing exotic loan programs
9. Forgetting to lock your rate
10. Not reading your loan documents

For details on each item please read the full U.S.News article.

I agree 100% with that list.  

I've mentioned before that my wife and I have been looking for houses.   Some of the items listed will be on our to-do list before we actually make an offer.    Other items we've avoided and will continue to avoid.   I've got items #1-5 covered already.  I watch my credit on a regular basis by getting my credit reports via AnnualCreditReport.com so we're covered on #1.    We'll avoid moving assets around, job hunting or applying for other credit before we apply for the mortgage so that handles #2,4,5.   I have been adding in taxes & insurance when estimating our potential payments so that addresses #3.   Items 6-10 we haven't done yet but plan to do.   Our next step will to get pre-approved for a mortgage.  We haven't done that one yet since we've been just casually shopping so far.

2 comments:

  1. With a preapproval, remember companies do a hard pull and if you don't find one within 3 months or so, they'll do another hard pull.

    Great tips!

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  2. The biggest mistake people make when buying a house is buying too much house and by doing so getting forced into a thirty year mortgage -- very costly!

    During the first ten years of a thirty year mortgage, the principal and interest payment is 90% interest.

    Buying a house you can afford with a 20 year mortgage could easily save you $100,000 or more in interest alone; add to that the fact that you will be saddled with mortgage for 10 years longer and all the factors mentioned in the article pale in comparison as "mistakes" based on cost.

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