4 Mortgage Loan Mistakes That Could Cost You Money

The thrill of finding your dream home can easily overshadow the importance of securing the right mortgage. Don't let excitement lead to hasty decisions that could cost you thousands. Let's break down the four biggest mistakes to avoid when getting a mortgage loan.

Mistake #1: Not Shopping Around for Mortgage Offers

It's tempting to jump on the first mortgage offer, especially when you're eager to close the deal. However, settling for the first offer can be a costly mistake. A LendingTree study reveals that 54% of borrowers only get one offer.

Jacob Channel, Lending Tree senior economist, emphasizes, "Different lenders can offer different rates to the same borrower. The more offers you can look at, the better."

Think of it like shopping for anything else: comparing prices at multiple stores often leads to better deals. The same applies to mortgages. Even a slight difference in interest rates can result in significant savings over the loan's lifespan. 45% of those who shopped around found a better mortgage offer, potentially saving thousands.

Mistake #2: Relying Solely on Recommendations

While your real estate agent's recommendations are valuable, relying solely on them can limit your options. Each lender has different offerings and approaches to securing a mortgage.

Aim for at least two different mortgage offers to compare. Diversifying your lender options opens the door to competitive rates and more favorable terms.

Mistake #3: Ignoring Different Loan Types

Mortgages aren't one-size-fits-all. In addition to the standard 30-year fixed-rate mortgage, there are adjustable-rate mortgages (ARMs), FHA loans, VA loans, and USDA loans, each with unique advantages and disadvantages.

Overlooking these options could mean missing out on a loan that suits your financial situation perfectly.

Shopping around with different lenders exposes you to a wider array of loan types, allowing you to make an informed decision.

Mistake #4: Not Considering Future Financial Plans

Your long-term financial goals should factor into your mortgage choice. Will you stay in the home for a long time, or might you move within the next decade? This can influence whether a fixed-rate or adjustable-rate mortgage is more suitable. Also, consider how your income might evolve and whether you plan to make extra payments to accelerate your mortgage payoff.

Aligning your mortgage choice with your future financial plans ensures you're making a strategic decision.

Conclusion

Securing a mortgage is a crucial step in your home-buying journey. By avoiding these common mistakes and taking the time to shop around, you can save money, minimize stress, and secure the best possible mortgage deal.

Need recommendations for trusted mortgage lenders in the Novi, Northville, South Lyon, Plymouth, and other surrounding communities in surrounding communities? Contact me here to schedule a call or video call, and I'll connect you with the right resources!