Rochester Real Estate | LOCAL Homes For Sale https://www.rochesterrealestateblog.com Rochester Real Estate | LOCAL Homes For Sale | Homes for sale in Rochester, NY, LOCAL Rochester real estate listings, market data, REALTOR® info, and high quality content updated every 15 minutes! Wed, 25 Jun 2025 11:50:30 +0000 hourly 1 https://wordpress.org/?v=6.7.2 https://www.rochesterrealestateblog.com/wp-content/uploads/2016/11/cropped-SITE-LOGO-512-x-512-1-32x32.png 12 Mortgage Mistakes To Avoid When Buying A Home – Rochester Real Estate | LOCAL Homes For Sale https://www.rochesterrealestateblog.com 32 32 June Home Maintenance Checklist: 40+ Must-Do Tasks to Prepare Your Home for Summer https://www.rochesterrealestateblog.com/june-home-maintenance-checklist-summer-prep/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=20501 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> May Home Maintenance Checklist: 30 Essential Tasks to Prepare Your Home for Summer https://www.rochesterrealestateblog.com/may-home-maintenance-checklist/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=20484 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> April Home Maintenance Checklist: How To Prepare Your Rochester NY Home For Spring https://www.rochesterrealestateblog.com/april-home-maintenance-checklist/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=20364 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> March Home Maintenance Checklist: Get Your New York Home Ready for Spring https://www.rochesterrealestateblog.com/march-home-maintenance-checklist/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=20338 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> How to Buy a House in New York https://www.rochesterrealestateblog.com/buy-a-house-in-new-york/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19906 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> How to Sell a House in New York https://www.rochesterrealestateblog.com/sell-a-house-in-new-york/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19905 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Risks of Buying a Non-Warrantable Condo In New York: What You Need to Know https://www.rochesterrealestateblog.com/non-warrantable-condo/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19796 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> What Builders Should Know About Spec Construction Loans In New York https://www.rochesterrealestateblog.com/builders-spec-construction-loans/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19795 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Moving To The Finger Lakes Region Of New York | Guide To Relocating To The Finger Lakes https://www.rochesterrealestateblog.com/moving-to-the-finger-lakes-region/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19875 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Navigating the Numbers: The Pros and Cons of Using Online Home Value Estimators For New York Real Estate https://www.rochesterrealestateblog.com/pros-cons-online-home-value-estimators/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19794 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> The Role of Location in Home Valuation In New York https://www.rochesterrealestateblog.com/role-of-location-home-valuation/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19768 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Lowe’s vs U-Haul: A Review of Truck Rental Companies https://www.rochesterrealestateblog.com/lowes-vs-uhaul/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19758 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Understanding the Importance of a Seller’s Property Condition Disclosure https://www.rochesterrealestateblog.com/property-condition-disclosure-statement/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19632 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> What are Delayed Showings and Negotiations in Real Estate In New York? https://www.rochesterrealestateblog.com/delayed-showings-negotiations/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19547 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> 8 Viable Tactics to Selling Your Home and Moving Out of State https://www.rochesterrealestateblog.com/selling-home-moving-out-of-state/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19542 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Unconventional Methods for Selling a House: Thinking Outside the Box https://www.rochesterrealestateblog.com/unconventional-methods-for-selling-a-house/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19519 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Should I Sell My House Off Market: Pros and Cons Explained https://www.rochesterrealestateblog.com/sell-house-off-market/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19503 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> What is PITI and How Does It Affect Your Mortgage https://www.rochesterrealestateblog.com/what-is-piti/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19498 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> How To Set A Home Renovation Budget https://www.rochesterrealestateblog.com/home-renovation-budget/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19490 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> How Does A Co-Borrowers Credit Scores Affect A Home Purchase? https://www.rochesterrealestateblog.com/co-borrower-credit-score/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19474 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> New Construction Final Walk-Through Checklist: Ensuring a Seamless Home Inspection https://www.rochesterrealestateblog.com/new-construction-final-walk-through/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19458 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Essential Tips for Pumping a Septic Tank: What You Need to Know https://www.rochesterrealestateblog.com/pumping-a-septic-tank/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19450 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Can You Submit Multiple Offers On Homes At Once – A Legal And Ethical Analysis https://www.rochesterrealestateblog.com/multiple-offers-on-homes-at-once/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19414 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> How to Get Your Home Photo Ready for Real Estate Listings https://www.rochesterrealestateblog.com/real-estate-photo-ready/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19409 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> What Does a Home Builder’s Warranty Cover? https://www.rochesterrealestateblog.com/home-builders-warranty/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19394 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> July 2023 Greater Rochester NY Area Real Estate Market Update https://www.rochesterrealestateblog.com/july-2023-rochester-ny-real-estate-market-update/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19403 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Who Pays Real Estate Commission When You Buy or Sell a Home https://www.rochesterrealestateblog.com/real-estate-commission/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19366 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Quitclaim Deeds: What You Need to Know https://www.rochesterrealestateblog.com/quitclaim-deeds/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19358 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> What to Know About Selling a Home As Is for Cash https://www.rochesterrealestateblog.com/selling-home-as-is-cash/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19347 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> How to Know if My House Has Paranormal Activity https://www.rochesterrealestateblog.com/is-my-house-haunted/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19342 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Why Find The History of a House https://www.rochesterrealestateblog.com/find-history-house/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19316 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> June 2023 Greater Rochester NY Area Real Estate Market Update https://www.rochesterrealestateblog.com/june-2023-rochester-ny-area-real-estate-market-update/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19313 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> What Does a Real Estate Lawyer Do? https://www.rochesterrealestateblog.com/real-estate-lawyer/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19181 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> May 2023 Greater Rochester NY Area Real Estate Market Update https://www.rochesterrealestateblog.com/may-2023-rochester-ny-area-real-estate-market-update/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19162 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> What to Know About Buying a Home For The First Time https://www.rochesterrealestateblog.com/buying-home-first-time/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19058 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> <strong>What Should a Buyer Look For at a Home Inspection?</strong> https://www.rochesterrealestateblog.com/what-look-for-home-inspection/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=18983 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Companies That Buy Houses For Cash Reviewed https://www.rochesterrealestateblog.com/companies-buy-houses-for-cash/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=18889 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Does Home Staging Work and What is The Cost? https://www.rochesterrealestateblog.com/does-home-staging-work/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=18814 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> What to Avoid When Getting a Mortgage https://www.rochesterrealestateblog.com/avoid-when-getting-mortgage/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=18797 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> <strong>5 Options For Replacing a Roof Reviewed</strong> https://www.rochesterrealestateblog.com/replacing-roof/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=18771 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> What Are Restrictive Covenants in Real Estate? https://www.rochesterrealestateblog.com/restrictive-covenants/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=18714 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Can The Court Force The Sale of Your House in Divorce? https://www.rochesterrealestateblog.com/court-force-sale-divorce/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=18693 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Real Estate Agent vs. Broker: What&#8217;s The Difference? https://www.rochesterrealestateblog.com/real-estate-agent-vs-broker/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=18650 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> How To Determine Square Feet In Your House For More Accurate Property Estimates https://www.rochesterrealestateblog.com/determine-square-feet/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=18167 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> 3 Things That Often Results in a Real Estate Agent Getting Sued https://www.rochesterrealestateblog.com/real-estate-agent-sued/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=18133 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> The Top 5 Types Of Home Inspections Buyers Should Consider https://www.rochesterrealestateblog.com/5-types-home-inspections/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=18119 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> The Pros And Cons Of Rent To Own Homes: What You Need To Know https://www.rochesterrealestateblog.com/pros-cons-rent-own-homes/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=18104 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> 5 Smart Things To Do Before Moving That Will Help Ease Your Transition https://www.rochesterrealestateblog.com/things-before-moving/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=18084 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> How to Become a Real Estate Agent https://www.rochesterrealestateblog.com/become-real-estate-agent/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=18071 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Renting A House Or An Apartment: Which Is The Better Option https://www.rochesterrealestateblog.com/renting-house-apartment/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=17871 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> The 5 Most Important Factors To Consider When Buying A House https://www.rochesterrealestateblog.com/5-factors-buying-house/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=17851 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> What Buyers And Sellers Need To Know About An Appraisal Gap https://www.rochesterrealestateblog.com/appraisal-gap/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=17827 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Pros And Cons Of Renting With Roommates – What You Need To Know https://www.rochesterrealestateblog.com/renting-with-roommates/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=17794 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> 6 Things You Should Know About Buying Land https://www.rochesterrealestateblog.com/things-know-buying-land/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=17773 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> How Long Should Home Sellers Wait To Respond To An Offer On Their Home? https://www.rochesterrealestateblog.com/home-sellers-wait-respond-offer/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=17745 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> How To Buy A House With A Low Credit Score https://www.rochesterrealestateblog.com/how-to-buy-a-house-with-a-low-credit-score/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=16819 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Things To Consider When Shipping A Car https://www.rochesterrealestateblog.com/things-to-consider-when-shipping-a-car/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=16248 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Home Depot Truck Rentals: What to Know Including Pricing https://www.rochesterrealestateblog.com/home-depot-truck-rentals-what-to-know-including-pricing/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=16156 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> 16 Things To Do Before Listing Your Home For Sale https://www.rochesterrealestateblog.com/16-things-to-do-before-listing-your-home-for-sale/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=16138 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> The Biggest Home Inspection Mistakes to Avoid https://www.rochesterrealestateblog.com/biggest-home-inspection-mistakes-to-avoid/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=16112 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> How Your Credit Score Impacts Your Ability To Buy A House https://www.rochesterrealestateblog.com/how-credit-score-impacts-buying-house/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=16086 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Top Winter Home Selling Mistakes | 7 Errors Made While Selling A House During The Winter https://www.rochesterrealestateblog.com/top-winter-home-selling-mistakes/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=16051 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Top Winter Home Buying Mistakes | 11 Errors Made While Buying A House During The Winter https://www.rochesterrealestateblog.com/winter-home-buying-mistakes/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=16013 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> What Address Change Form Should I Use At The Post Office? https://www.rochesterrealestateblog.com/address-change-form-post-office/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=15981 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> What Does Contingent Status Mean in Real Estate? https://www.rochesterrealestateblog.com/what-does-contingent-status-mean-real-estate/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=15956 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> DIY Renovation Ideas For Your Backyard https://www.rochesterrealestateblog.com/diy-renovation-ideas-backyard/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=15937 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> How to Rent Your First Apartment Guide https://www.rochesterrealestateblog.com/how-to-rent-an-apartment/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=15931 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Tips For Selling A Home Virtually https://www.rochesterrealestateblog.com/tips-selling-a-home-virtually/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=15907 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> The Complete Winter Storage Checklist For Your Belongings https://www.rochesterrealestateblog.com/winter-storage-checklist/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=15885 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Should I Waive My Home Inspection When Buying A House? https://www.rochesterrealestateblog.com/should-i-waive-my-home-inspection/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=15870 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> The Biggest Self Storage Companies Reviewed https://www.rochesterrealestateblog.com/biggest-self-storage-companies/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=15836 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Earnest Money and House Deposits Explained https://www.rochesterrealestateblog.com/earnest-money-house-deposits-explained/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=15760 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Moving Mistakes To Avoid https://www.rochesterrealestateblog.com/moving-mistakes-to-avoid/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=15568 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Top Mortgage Myths | Demystifying Common Home Loan Misconceptions https://www.rochesterrealestateblog.com/top-mortgage-myths/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=15102 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> First-Time Home Buyer Mistakes to Avoid https://www.rochesterrealestateblog.com/first-time-home-buyer-mistakes/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=14815 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> 10 Tips For Adding Appeal To Your Home This Summer https://www.rochesterrealestateblog.com/10-tips-adding-appeal-to-home-this-summer/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=14237 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Exploring The Merits of Smart Home Technology When Selling a Home https://www.rochesterrealestateblog.com/smart-home-technology-selling-a-home/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=13782 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Top Frequently Asked Questions From Home Sellers https://www.rochesterrealestateblog.com/top-frequently-asked-questions-home-sellers/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=2424 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> First Time Home Buyer Programs In Rochester NY &#8211; Updated January 2025 https://www.rochesterrealestateblog.com/first-time-home-buyer-programs/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock http://rochesterrealestateblog.com/?p=580 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> How New Doors &#038; Windows Can Boost Your Home Value https://www.rochesterrealestateblog.com/how-new-doors-windows-boost-your-home-value/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=13643 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Top 5 Things To Know When Flipping Your First House https://www.rochesterrealestateblog.com/5-things-to-know-when-flipping-your-first-house/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=13574 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> What Are The Best Mortgage Options for Self Employed Borrowers? https://www.rochesterrealestateblog.com/mortgage-options-for-self-employed-borrowers/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=13450 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Top 10 Best Places To See Christmas Lights In Rochester NY https://www.rochesterrealestateblog.com/top-10-best-places-see-christmas-lights-rochester-ny/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=10236 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> What Are The PROs And CONs Of Multifamily Homes? https://www.rochesterrealestateblog.com/what-are-the-pros-and-cons-of-multifamily-homes/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=13219 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> What Low-Cost Home Improvements Should You Make Before Selling Your Home? https://www.rochesterrealestateblog.com/low-cost-home-improvements-you-should-make-before-selling-your-home/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=13114 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> 15 Things Millennial Home Buyers Look At While Buying A House https://www.rochesterrealestateblog.com/15-things-millennial-home-buyers-look-at-while-buying-a-house/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=13028 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> How Does A Fence Increase The Value Of Your Home https://www.rochesterrealestateblog.com/how-does-a-fence-increase-the-value-of-your-home/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=12995 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> 5 Simple &#038; Low Cost Fixes To Make Your Home More Appealing To Buyers https://www.rochesterrealestateblog.com/5-simple-and-low-cost-fixes-to-make-your-home-more-appealing-to-buyers/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=12779 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> How To Improve A Homes Curb Appeal In Rochester NY https://www.rochesterrealestateblog.com/how-to-improve-a-homes-curb-appeal-rochester-ny/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=12665 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> 7 Ways to Create an Energy-Efficient Home While Conserving Your Budget https://www.rochesterrealestateblog.com/7-ways-create-an-energy-efficient-home/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=12633 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Hiring Movers Vs. Moving Yourself | The PROs &#038; CONs Of Each https://www.rochesterrealestateblog.com/hiring-movers-vs-moving-yourself/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=12592 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Should You Pay Off Student Loans Before Purchasing a Home? https://www.rochesterrealestateblog.com/pay-off-student-loans-before-purchasing-a-home/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=12531 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Should I Build A New Home Or Buy An Existing Home? https://www.rochesterrealestateblog.com/should-i-build-a-new-home-or-buy-an-existing-home/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=2497 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Buying A Condo Vs. Renting A Condo | What Are The PROs &#038; CONs? https://www.rochesterrealestateblog.com/buying-a-condo-vs-renting-a-condo/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=12402 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> 9 Money Saving Moving Tips | How To Cut Costs When Moving https://www.rochesterrealestateblog.com/9-money-saving-moving-tips/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=12341 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> How to Create a Proper Home Maintenance Checklist https://www.rochesterrealestateblog.com/how-to-create-a-proper-home-maintenance-checklist/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=12300 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> 5 Tips For Tenant Screening | How To Weed Out Bad Tenant Applicants https://www.rochesterrealestateblog.com/tips-for-tenant-screening/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=12291 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> The Best Social Media Blogs For Real Estate From 2017 https://www.rochesterrealestateblog.com/best-social-media-blogs-2017/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=12045 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> The Best Home Improvement Blogs From 2017 | Advice For Home Remodeling https://www.rochesterrealestateblog.com/best-home-improvement-blogs-2017/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=12044 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> The Best Mortgage Blogs From 2017 | Advice For Home Financing https://www.rochesterrealestateblog.com/best-mortgage-blogs-2017/ Tue, 17 Jan 2017 12:45:27 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=12043 What Are The Most Common Mortgage Mistakes Made By Home Buyers? [caption id="attachment_10418" align="aligncenter" width="450"]12 Mortgage Mistakes To Avoid When Buying A Home 12 Mortgage Mistakes To Avoid When Buying A Home[/caption] One of the most important steps in the home buying process is figuring out the financing.  There are dozens of questions frequently asked about mortgages and the mortgage process. One topic that doesn't get discussed enough when it comes to home financing are the common mortgage mistakes that are made.  Truth is, there is someone out there right now making a mistake that is likely costing them their opportunity to buy a home. It's extremely important that when buying a home, buyers are educated on the most common mortgage mistakes made so they can avoid them at all costs.  Making one of the most common mortgage mistakes can be the difference between a buyer getting approved for a loan or not. Below you'll find out 12 of the most common mortgage mistakes made when buying a home.  If you're thinking about buying a home or are currently in the market, make sure you avoid the following 12 mistakes.

1.) Not Using A Local Mortgage Company

One of the first things I discuss with buyers is the importance of understanding that real estate is local.  As a Penfield NY real estate agent, I have the ability and experience to help assist Penfield NY buyers and sellers.  Asking me to help a buyer or seller in San Diego would simply not be fair to the customer or myself. Just like I'm not able to provide quality real estate advice to a buyer or seller on the other side of the United States, a mortgage lender in Rochester NY cannot provide quality service either.  One of the biggest mortgage mistakes that is made when buying a home is not selecting a local mortgage company. There are hundreds of reasons why real estate markets are different and asking a mortgage company located in another city or state to provide quality service isn't a smart idea.  It's always suggested when buying a home that you hire a local mortgage company. If you're unsure how to find out who the top mortgage lenders are in your area, there are several ways to find out.  One of the best ways to find a top mortgage lender in your area is to ask an experienced and successful local real estate professional.  Top real estate agents in your area will have recommendations to some fantastic mortgage companies.

2.) Getting A Mortgage Pre-Qualification, Not Pre-Approval

[caption id="attachment_10419" align="aligncenter" width="450"]Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake! Getting Pre-Qualified, Not Pre-Approved, Is A Common Mortgage Mistake![/caption] Many potential home buyers don't realize that there's a difference between a mortgage approval and mortgage pre-qualification, did you?  Not getting a mortgage pre-approval is a huge mistake often made when buying a home. A mortgage pre-qualification sometimes is only as good as the piece of paper that it's printed on.  A mortgage pre-qualification is often issued by a mortgage lender without doing any research on the potential borrower.  Many times a mortgage pre-qualification is issued based on the information a potential borrower provides to the lender.  It's optimistic to think that all potential borrowers are going to be 100% honest when attempting to get a pre-qualification, but that's simply not the case. Getting a mortgage pre-approval is highly recommended when buying a home for many reasons.  A mortgage pre-approval is issued only after a lender reviews pay stubs, tax returns, credit reports, and other important financial information about a potential borrower. Top real estate agents will ask for a mortgage pre-approval before showing homes since it greatly improves the chances the buyer is able to secure financing, which is often unknown when only having a mortgage pre-qualification. Bottom line, not getting a mortgage pre-approval is one of the worst mortgage mistakes made by buyers.  Taking the additional time required to get a mortgage pre-approval and putting forth the extra effort will pay huge dividends when buying a home.

3.) Assuming All Mortgage Products, Lender Rates, & Terms Are The Same

Another mortgage mistake often made by home buyers is believing that all mortgage products, lender rates, and terms are identical.  An important decision that must be made when buying a home is deciding which type of mortgage is the best for your situation. Is a 15 or 30 year mortgage best? Is a conventional or an FHA mortgage best for you?  Is an adjustable rate mortgage or fixed rate mortgage best? These are just a few mortgage products that lenders will offer.  Each of these mortgage products will offer different terms as well as rates.  It's highly recommended that you know how to interview real estate agents when buying a home and it's no different when deciding on financing. There are several questions that you should consider asking mortgage companies when shopping around for your home financing.  Below are some of the best ones to ask potential lenders.
  1. Which type of mortgages do you offer?
  2. What are the current rates for each mortgage product?
  3. What are the costs associated with each mortgage product?
  4. What are your credit score requirements for each mortgage product?
  5. Why should I use your company to obtain my home loan?
Asking these questions maybe difficult for some buyers, but asking them can tell a buyer a lot about the lender.  Buyers who don't realize there is a difference between mortgage products, each lenders rates, and the terms are potentially costing themselves hundreds of dollars.

4.) Put No Money or Small Amount Of Money Down

There are several mortgage products that allow buyers to purchase a home with no money or a small amount of money down.  While this may sound like a fantastic opportunity, it's actually one of the most common mortgage mistakes. Before deciding to purchase a home with no money or a small amount of money down, you need to compare the PROs and CONs of small down payment home loans. For example, buyers who're obtaining a home loan that allows no money or a small amount of money down are actually putting themselves at a disadvantage when compared to other buyers in the marketplace.  If a property has multiple offers and one buyer is putting a large amount of money down and one is not, most sellers are likely going to accept the offer with the larger down payment, assuming the majority of the other terms are similar. Certainly if you're unable to purchase a home with a large amount of money down, taking advantage of no money or small down payment home loans is a good idea.  There are many buyers that're capable of putting money down on a home but choose to make this mortgage mistake and put no money down. Check out this excellent video below which discusses some of the no down payment mortgage mistakes to avoid! [embed]https://www.youtube.com/watch?v=yfyvokaB5vQ[/embed]

5.) Ignoring Credit History & Score

Credit history and scores have a huge impact on a buyers ability to obtain a home loan and also in determining the mortgage rate.  Ignoring credit history and scores is another common mortgage mistake that's made when buying a home. When buying a home, buyers should be aware of their credit history and score.  One of the first steps to getting approved for a mortgage that a lender will take is to pull and review a buyers credit report.  Buyers should be aware of that there are three credit bureaus that'll be reviewed when getting a mortgage.  The three credit bureaus are Equifax, Transunion, and Experian.  These three credit bureau reports are often put into one clean report often referred to as a Tri-Merge credit report. Depending on the type of mortgage a buyer is attempting to secure will determine what the minimum credit score requirements are.  In addition, mortgage companies have different guidelines, also referred to as mortgage overlays, which can impact credit score requirements.  For example, many mortgage companies will require a minimum score of 640 but others may allow as low as a 620 credit score, depending upon other circumstances of the buyer. It's extremely important when buying a home that buyers are aware of their overall credit picture.  Ignoring credit history and scores is one of the worst mortgage mistakes made by buyers.

6.) Adding Too Much Debt

A surefire way for a buyer to get denied for a mortgage after pre-approval is to add a bunch of extra debt.  Another popular mortgage mistake made by home buyers is adding too much debt. Ask any experienced real estate agent if they have any horror stories of buyers adding too much debt prior to buying a home and I'm certain you're going to hear dozens of stories.  As a buyer is navigating through the home buying and mortgage process with the assistance of their Realtor®, one of the most important pieces of advice is to not add any additional debts. Adding too much debt when going through the mortgage process can mess up a buyers debt-to-income ratios, which ultimately can result in being denied a mortgage.

7.) Skipping The Rate Lock

[caption id="attachment_10420" align="aligncenter" width="450"]Don't Skip The Rate Lock When Buying A Home! Don't Skip The Rate Lock When Buying A Home![/caption] When a buyer is completing their mortgage application, one of the decisions they'll have to make is whether to lock in their mortgage rate or not.  Another most common mortgage mistakes that is made when buying a home is skipping the rate lock. The mortgage rate lock is an agreement made between the lender and the borrower which secures the current prevailing mortgage rate for a specified amount of time.  Mortgage rate locks can vary in time from 7 days to 90 days. Buyers who commit this common mortgage mistake of skipping the rate lock leave themselves open to some serious risk.  If a buyer decides to float their mortgage interest rate and not lock their rate, they may end up with a much higher rate if rates were to rise.  For example, if a buyer passes on a rate lock at 4.00% and a week later the rates rises to 4.5%, the buyer cannot take advantage of the lower rate of 4.00%. If a buyers rate lock is expiring and there is still no closing date set, they do have the option to extend their rate lock.  The cost of extending a rate lock will vary from lender to lender.  The lender will want to know why the closing is being delayed and if it looks like it's only going to be delayed a few days, many lenders will extend the rate lock at no cost to the borrower.

8.) Waiting To Shop For Homeowners Insurance

As mentioned above, shopping around for the best mortgage company and rates is highly recommended.  The same goes for shopping for homeowners insurance.  There are many buyers who make the common mortgage mistake of waiting to shop for homeowners insurance until the last minute. Whether a buyer is getting homeowners insurance for the first time or the fifth, it's important to remember that just like interest rates can fluctuate from lender to lender, homeowner insurance rates can fluctuate from one insurance provider to another. Homeowners insurance will be required for any buyer that's financing their home purchase, so it's critical to shop around for homeowners insurance early in the home buying and mortgage process.  Buyers who make the mortgage mistake of waiting to shop for homeowners insurance often delay their own closing because the loan will not be funded until homeowners insurance is purchased and paid for.

9.) Opening Up New Credit Lines

There are many home buyers who believe opening up new credit lines is harmless as long as they don't run up balances on them.  This is a big misconception and opening up new credit lines is actually one of the most common mortgage mistakes. Anytime a new credit line is opened up, whether it's a credit card or a personal loan, a credit inquiry will be made which can impact a borrowers credit scores.  It's important to find out anytime a new credit line is being opened, whether it's during the process of buying a home or not, is whether the credit inquiry is going to be a hard or soft inquiry because there is a difference. Generally speaking, hard inquiries have a larger impact on a borrowers credit score than soft inquiries.  Understanding the difference between hard and soft credit inquiries is suggested, whether buying a home or not.

10.) Neglecting To Consider The Total Costs Of Owning A Home

Owning a home is not as simple as paying the monthly mortgage and waiting until the next months mortgage is due.  Believing that simply paying the mortgage and not considering other costs of owning a home is another common mortgage mistake made when buying a home. There are actually many costs associated with buying a home.  Before buying a home, it's vital to understand how much it costs to buy a home.  This includes taking into account the costs of potential repairs, utilities, and other living expenses such as groceries and auto insurance. There are many mortgage companies who will not explain to a buyer that there are additional costs involved in owning a home.  Buyers who neglect to consider all the costs of owning a home often find themselves in a vulnerable position in the future, especially if they're buying towards the top of their budget.

11.) Sporadic Job History

One of the most important factors that mortgage companies take into consideration when approving or denying a borrower is their job history.  A buyer that's had a sporadic job history or that's had several different jobs over the past couple years may have a difficult time getting a home loan, unless the jobs are in a similar line of work. Another popular mortgage mistake made when buying a home is having a patchy job history.  Any buyer who is preparing to get approved for a mortgage needs to remember that job stability is vital to getting approved for a home loan.

12.) Not Paying Attention To The Fees Associated With Getting A Mortgage

Last, but certainly not least, not paying attention to all the fees associated with getting a mortgage is another common mortgage mistake.  Mortgage products and rates will vary from lender to lender, as mentioned above, and the same goes for the fees a lender will charge. Buyers need to ask any potential lender what the costs of getting a mortgage through their company will be.  It's recommended to have those costs in writing in order to compare companies. Some of the most common fees that'll vary from lender to lender include the origination fee, credit report fee, processing fee, and underwriting fee.  These mortgage fees can vary significantly and can potentially cost a buyer a significant amount of money.

Final Thoughts

If you're thinking about buying a home and you'll be obtaining a home loan, you must avoid these common mortgage mistakes.  Making one of the above 12 mortgage mistakes will throw a huge wrench into your home buying experience. If you're not 100% sure whether or not something will impact your ability to get a mortgage, ask beforehand.  Buyers who decide to make decisions without asking a professional end up being very unhappy, especially if they're unable to obtain a home loan.

Other Top Mortgage Resources

If you're thinking about buying a home in Rochester NY, you must avoid these mortgage mistakes at all costs.  Making any of these common mortgage mistakes can jeopardize your chances of getting a home loan.  If you don't have an experienced Rochester buyers agent yet, contact me so we can discuss your home search in detail!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "12 Mortgage Mistakes To Avoid When Buying A Home" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]>