At Centum Mortgage Store, Ltd., we specialize in helping people like you get the best possible home mortgage. To those who are not immersed in the mortgage business like we are, home mortgages can seem confusing, and the process of applying for one and negotiating for the best rate can be highly stressful. Over the years, we’ve seen many people make mistakes when it comes to their home mortgages, and we want to help you avoid doing the same. In this article, we’ll be going over three common mistakes and how you can avoid them.
- Not Shopping Around for Your Loan- One of the first mistakes when it comes to your home mortgage is taking the first deal you’re offered rather than shopping around. While you may pre-qualify for a mortgage with a certain lender, you don’t know for sure whether they’re offering you the best deal unless you take the time to look around. When you turn to us at Centum Mortgage Store, Ltd., we’ll help you search for the best home mortgage, not merely the first.
- Making a Low Down Payment- Another common home mortgage mistake is not making a high enough down payment. If you put down at least 20 percent of the total price, you can avoid paying mortgage insurance, which is a fee of up to 4% of the mortgage balance. The percentage fee declines as the down payment increases. We advise our clients to make at least a 20% down payment if at all possible in order to avoid paying extra for mortgage insurance.
- Exceeding Your Budget- The last home mortgage mistake we’ll cover here is buying a house that’s too expensive. While you may dream of a big, fancy house, you don’t want to devote so much of your monthly income to the mortgage on it that you have to forego paying for other expenses that are even more important, such as replacing an old car or saving for your child’s college education. To ensure that you have enough left over to live comfortably after your mortgage payment, make sure you’re not spending more than 28 percent of your yearly pre-tax income on your mortgage–for example, if you make $75,000 a year, your monthly payment shouldn’t exceed $1,750.