Dean Decker
Signature Real Estate Group

Common Mistakes to Avoid When Obtaining a Home Mortgage!


You are about to make what will most likely be the largest transaction of your life: your home mortgage. Unfortunately, many homebuyers do not take the time to research some of the details of mortgages. Remember that the right lender can help you make good, sound business decisions based on your financial situation.

  • Find a Reputable Lender - This is the most important choice you can make when starting the mortgage process. If you don t trust your lender, you are in for a long and stressful home-buying experience. 
  • Pricing - Don t be lured into a mortgage company strictly by promises of low rates. Work with a someone your family or your Realtor can recommend. If they have ties to others around you and have been in business for many years it is less likely you will be faced with mortgage challenges.
  • Programs - You will see several programs that offer special low-interest rates. Keep in mind that they may not be the best program for your situation. Make your lender explain what programs they feel best serve your needs and more importantly, why. 
  • Fixed or Adjustable Rate Mortgage (ARM) -  In general, the longer you plan on staying in your home, the better a fixed rate mortgage will suit your needs. 
  • Decide when to lock your rate - Deciding when to lock in to a mortgage rate can be difficult. Many people will float, trying to guess when rates have hit bottom. Unfortunately, a lot of times they will wait too long and end up with a much higher interest rate.
  • Be prepared for closing costs In addition to the down payment, you will be required to pay fees and other closing costs at the time of the final transaction. Closing costs typically range from 2 percent to 6 percent but will be dependent upon your situation. Lenders must provide you with a "Good Faith Estimate." The "Good Faith Estimate" will breakdown all costs so that you may know what to expect at closing. 
  • Close at the end of the month When making a mortgage payment, you will be paying interest that has accrued from the previous month. Upon closing however, your lender will charge you prepaid interest for the date the loan is recorded through the end of that month. Therefore, one way to lower your closing costs is to close in the latter part of the month. This will lower the amount of prepaid interest that you must pay. 
  • Look out for hidden fees -- Check for certain miscellaneous fees such as inspection, notary, and document preparation. These types of fees can mean hundreds of dollars in closing costs. Remember that this is your money at stake. Never should you be afraid to ask for explanations of fees you are being charged.