{"id":19370,"date":"2022-02-15T15:15:00","date_gmt":"2022-02-15T23:15:00","guid":{"rendered":"http:\/\/www.roryc.ca\/blog\/?p=19370"},"modified":"2022-02-14T14:45:47","modified_gmt":"2022-02-14T22:45:47","slug":"mortgage-to-dos-mistakes-to-avoid","status":"publish","type":"post","link":"https:\/\/www.roryc.ca\/blog\/2022\/02\/mortgage-to-dos-mistakes-to-avoid\/","title":{"rendered":"Mortgage To-Dos &#038; Mistakes to Avoid"},"content":{"rendered":"<p style=\"text-align: justify;\">For most people, buying a home is the largest financial decision they\u2019ll make in their lifetimes. It\u2019s not a deal easily undone once the final papers are signed, so it makes sense to understand the ins and outs of mortgages before taking the leap into homeownership. Here are six mortgage mistakes to avoid (and what to do instead).<\/p>\n<p style=\"text-align: justify;\"><strong>1. Draining Cash Reserves for a Down Payment<\/strong><br \/>\nHome buyers typically put down 20% of a home\u2019s purchase price to eliminate mortgage insurance and keep monthly payments low. But draining every bit of cash from your savings is a big mistake, especially when there are additional home-buying costs, including :<\/p>\n<p style=\"text-align: justify;\">\u2022 A home inspection<br \/>\n\u2022 Closing costs<br \/>\n\u2022 Home insurance<\/p>\n<p style=\"text-align: justify;\">What to Do Instead<br \/>\nAdd all of the expected costs of buying a home, then calculate the down payment percentage you can afford. Don\u2019t forget to account for major purchases, such as furniture or appliances, you might need to make immediately. You can always make an extra mortgage payment or add to the principal each month, but starting out with no cash on hand is a major mortgage mistake.<\/p>\n<p style=\"text-align: justify;\"><strong>2. Not Getting Pre-Approved<\/strong><br \/>\nPicture this: You find the home of your dreams, and it\u2019s within your budget. Turns out, it\u2019s also the home of someone else\u2019s dreams. In a tight market, making an offer loaded with contingencies, such as mortgage approval, isn\u2019t likely to make you successful.<\/p>\n<p style=\"text-align: justify;\">What to Do Instead<br \/>\nGet pre-approved for a mortgage. This makes you more competitive when you\u2019re up against another buyer. If you\u2019re a veteran, look to the Veterans Affairs office for pre-approval too. Its rates may save you money in closing costs and help you get more home for your money.<\/p>\n<p style=\"text-align: justify;\"><strong>3. Choosing the First Bank That Approves You<\/strong><br \/>\nIn a rush to get pre-approved, you might decide to go with the first bank that says yes. But the rate could be higher than other banks or mortgage providers. Credit unions, smaller banks, and online mortgage lenders can have dramatically different rates and fees.<\/p>\n<p style=\"text-align: justify;\">What to Do Instead<br \/>\nShop around to get the best mortgage rate. It could save you hundreds of dollars a month and thousands in closing costs. Make sure you understand your mortgage, including the type of loan you\u2019re approved for, the length of the loan, and its rate.<\/p>\n<p style=\"text-align: justify;\"><strong>4. Buying Too Much House<\/strong><br \/>\nIt can be exciting to see how much you\u2019re approved for, but one of the biggest mortgage mistakes is shopping for a house that hits the top of your budget. Many new home buyers don\u2019t realize that what they pay toward principal and interest is just half of their monthly mortgage payment. They fail to recognize that property taxes, homeowners insurance, and, sometimes, mortgage insurance are also included. Unexpected expenses can be hard to meet when you borrow up to your limit.<\/p>\n<p style=\"text-align: justify;\">What to Do Instead<br \/>\nYour total mortgage payment shouldn\u2019t be more than 28% of your monthly pre-tax income. If you make $100,000 a year before taxes \u2014 just over $8,000 a month \u2014 your mortgage payment should be roughly $2,300. Ask your mortgage lender about the best budget for you.<\/p>\n<p style=\"text-align: justify;\"><strong>5. Paying Full Price for Commission<\/strong><br \/>\nAnother mortgage mistake is paying full-price commission to a real estate agent. The average commission rate is about 5.49% of the sale price, which can deduct thousands from your potential profits. But commission rates aren\u2019t standardized or set in stone. You can negotiate for lower rates.<\/p>\n<p style=\"text-align: justify;\">What to Do Instead<br \/>\nWork with a low-commission real estate company that negotiates with agents to procure a full range of services for a fraction of the traditional price. You\u2019ll still get an opportunity to ask your Realtor questions and choose the one who\u2019s best for you. The only difference is you\u2019ll pay less for their services in the end.<\/p>\n<p style=\"text-align: justify;\"><strong>6. Accepting Added Fees<\/strong><br \/>\nIf you look closely at the closing paperwork, you\u2019ll notice several additional costs. These might include :<\/p>\n<p style=\"text-align: justify;\">\u2022 Loan origination fee<br \/>\n\u2022 Application fee<br \/>\n\u2022 Broker fee<br \/>\n\u2022 Underwriting fee<br \/>\n\u2022 Sign-up fee<br \/>\n\u2022 Document preparation fee<br \/>\n\u2022 Messenger fee<\/p>\n<p style=\"text-align: justify;\">What to Do Instead<br \/>\nTalk to your Realtor or mortgage lender to see if these fees are negotiable or truly necessary. Bottom line? Take a close look at the closing documents before you sign.<\/p>\n<p style=\"text-align: justify;\"><a href=\"https:\/\/realtybiznews.com\/mortgage-mistakes-to-avoid\/98765989\/\" target=\"_blank\" rel=\"noopener\">6 Mortgage Mistakes to Avoid<\/a> by Thomas O&#8217;Shaughnessy | Realty Biz News<\/p>\n","protected":false},"excerpt":{"rendered":"<p>For most people, buying a home is the largest financial decision they\u2019ll make in their lifetimes. It\u2019s not a deal easily undone once the final papers are signed, so it &hellip; [<a href=\"https:\/\/www.roryc.ca\/blog\/2022\/02\/mortgage-to-dos-mistakes-to-avoid\/\">read more<\/a>]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9],"tags":[],"class_list":["post-19370","post","type-post","status-publish","format-standard","hentry","category-mortgage"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Mortgage To-Dos &amp; Mistakes to Avoid &#8226; Rory C Real Estate | Oakwyn Realty<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.roryc.ca\/blog\/2022\/02\/mortgage-to-dos-mistakes-to-avoid\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Mortgage To-Dos &amp; Mistakes to Avoid &#8226; Rory C Real Estate | Oakwyn Realty\" \/>\n<meta name=\"twitter:description\" content=\"For most people, buying a home is the largest financial decision they\u2019ll make in their lifetimes. 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