Debt Free

Mortgage Mistake #1
Quitting your job? For god’s sake, wait until after your mortgage funds. Some of you will have the occasion to either change jobs or just up and quit entirely. Maybe you’re thinking of joining the ranks of the crazy, self employed entrepreneurs. Whatever the reason, get your priorities in order. Your employment will be verified as part of the mortgage process when you get pre-approved. Some people make the mistake of thinking that this is the last time they will have their employment verified. In many cases they are mistaken.

Most lenders will verify the employment of a prospective creditor immediately before the loan funds. If you have changed your employment status (to unemployed) without informing them, and they discover this fact, you could derail your chances of getting your mortgage. If you tell a little white lie by telling them you are employed, when in fact you aren’t, it could be considered fraud. In that case, you will have found another way to take of your housing worries. The state will provide housing for you, free of charge.

Mortgage Mistake #2
Failure to get your credit in order before you apply for your mortgage is a mistake made by too many loan applicants. This actually applies to any major purchase, not just mortgages. As I said in other posts, a significant reduction in interest rates can be  had by raising your credit score only a few points. In many cases this is not difficult and can be done in less than a month. It's another reason why you should know your credit score at all times.

Mortgage Mistake #3
Another mortgage mistake made by many applicants is the failure to ask for a better deal. That’s right, in many cases you can just ask for a better deal on your mortgage and your broker or lender will give it to you. Ask for fees to be reduced or eliminated. In many cases there’s no reason to pay these unless you want to enrich the lender. It will depend on the lender, your credit and their policies concerning such things.

If you have great credit, obviously you’ll be in a better position to get a fee reduction or elimination. When you’re dealing with someone who’ll be selling the paper, they are going to make quite a bit of money on the sale and you will be in a good position to ask for a reduction. I saved over $1,000 on my mortgage by simply asking. It’s not just the initial savings. Remember that you pay interest on these fees for the term of the loan. At the end of the 30 years, with my 6% mortgage, that $1,000 fee would have ended up costing over $1,100 in interest. It pays to ask. You can also negotiate for interest rates and other loan costs to be reduced or eliminated.

If you’re in the U.S., have a safe Independence Day holiday. Happy Birthday!