Common Mortgage Mistakes
Real Estate Update with Cheryl Marlow
770 KKOB AM’s Residential Real Estate Specialist!
Let’s talk about the common mistakes that mortgage borrowers may make and ways that they can avoid these costly slip-ups! Almost all of the mistakes borrowers make will fall into two categories: transactional or lifestyle decisions. Both are critical to the success of a deal!
Transactional decisions can be anywhere from finding a mortgage provider and shopping for alternative providers to making price comparisons and obtaining market information. The ultimate goal of a borrower is to get a loan at the best terms available in current market conditions, and simple mistakes can result in paying way too much for their mortgage. Here’s an example of a typical mistake. Say a borrower obtains a $200,000 loan that he needs to buy a home. The mortgage broker charges him a 1% fee and finds a loan at a competitive price. Then the borrower comes to find out that the broker is Also being paid 1% by the lender which tells them that without that extra 1% from the lender his rate would have been lower. The borrower’s mistake ultimately cost him a higher interest rate which in turn will lead to a higher monthly payment.
Some people will even quote prices below what the provider can deliver which is called “Lowballing”. They do this in order to hook the customer! We often see this on internet loan providers. Remember, if it sounds too good to be true, then it probably is.
Now the other kind of decisions are lifestyle decisions. They include how much to spend on a home, to refinance or not to refinance, what kind of mortgage to take and how large of a down payment to make. Ultimately the goal is to come out with as much money as possible when the home is sold. Lifestyle decision mistakes can be much more costly in the long run than transaction mistakes. They are complicated and sometimes very difficult to analyze.
In order to avoid these very costly mistakes, in the real estate world, it’s imperative to work with qualified people that are transparent in all of their dealings. Buying a home is too large of a financial and emotional decision to try and do it alone. And that’s why it’s so important to work with a knowledgeable agent like myself. With 24 years of experience I have local lenders on my team, and together we will assure the best in service and value for each of our clients! It is the greatest thing you can do for yourself. Especially when you’re dealing with your own hard earned money!
Cheryl Marlow
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