Assisting Home Buyers in Avoiding Costly Blunders Before Closing

Assisting Home Buyers in Avoiding Costly Blunders Before Closing
Before closing, home buyers might make mistakes that put their mortgage at risk or cause them to miss out on homeownership entirely.

Most home buyers are so busy with saving up for a down payment and getting their feet in the door that they neglect the small problems that might trip them up.

Some of the most typical mistakes home buyers make, say real estate agents and financial experts, include financing a vehicle or other large acquisitions before closing. They may use financing to purchase new furnishings and appliances for their new house. According to Jim Roberts, president of True North Mortgage, all of these actions are a major no-no, since lenders will conduct a final credit inquiry check prior to actually closing. The further accumulation of debts puts approval of the loan in jeopardy.

Another blunder made by home buyers before closing is failing to shop around for a mortgage. Broker and Proprietor of 1st United Realty & Mortgage Kahri Washington told The Mortgage Reports that, “While many lenders’ rates are fairly near in price to others, other lenders charge rates that are over the average. A poor loan with a higher interest rate may be quite expensive in the long run, so make sure to shop around and acquire written quotations from many different mortgage lenders.” This way one can avoid big expenses before closing.

The findings of a 2018 Freddie Mac study show that receiving one extra rate quotation while shopping for a mortgage will save potential borrowers an average of $1,500 over the course of a 30-year fixed rate loan. Eighty percent of borrowers saved between $966 and $2,086 over the life of their loan, after receiving an additional rate quotation while shopping for a mortgage. A Freddie Mac study also found that 80% of borrowers who got five quotes were able to save roughly $2,089-$3,904.