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10 Common mistakes
Don't:
1. Choose the Wrong Mortgage: With the option of instant refinancing, home loans are no longer the lifetime obligations they used to be. Still, you don't want to be weighed down for even a short period of time with the wrong one. Investigate all your options, then lay your choices side-by-side and do the math, making sure to compare worst-case scenarios. Be sure to look at initial interest rates, future interest rates and payments (if different), and the possibility of prepayment penalties which I highly recommend staying clear from.
2. Confuse "Pre-Approved" and "Pre-Qualified" with a Loan Commitment: These are debatable terms in real estate because not all lenders apply the same definition to each expression. In fact, one leading real estate dictionary contains neither expression because their definitions are uncertain. According to one school of thought, however, when you are "pre-qualified," the lender is making an educated guess about how much you can borrow based on information you've provided. When you are "pre-approved," the lender has verified everything you have told him or her and is offering to lend you up to a given amount at current interest rates -- under certain conditions. Whether pre-qualified or pre-approved, final clearance and a check at closing -- a loan commitment -- are subject to an appraisal satisfactory to the lender, good title, a last-minute credit check, and other verifications. When meeting with lenders, always ask how they define each term and what additional steps will be required to obtain a loan.
3. Have Too Much Credit: Extensive credit is almost as bad as no credit or even bad credit. Even if you pay your bills on time, lenders tend to focus just as much on how much credit you have available to you as they do on timeliness. So being up to your ears in car loans and credit cards is a sure way to be turned down for a mortgage. Postpone any big ticket purchases until after you buy your house.
4. Lie on Your Loan Application: Exaggerating your income on a mortgage application or putting down other untruths can be a federal offense. Lenders rarely prosecute liars. But if they find out later, they can call your loan due and payable. Don't ever sign your name to a loan application that is not completely filled out either.
5. Ignore Your Payments: The worst thing you can do is ignore phone calls and letters from your lender when you are behind on your payments. Lenders have many options at their disposal to help keep borrowers from losing their homes to foreclosure. But they can't do anything for you unless they can talk to you about your difficulties. Lenders are the enemy only if you give them no other choice.
6. Skip a Home Inspection: Failing to make your purchase contingent on an acceptable home inspection could be a costly mistake. Independent home inspectors examine homes from top to bottom. They'll be able to tell you whether the roof leaks, whether the air conditioning systems are in good shape, if the plumbing is running well, if the electrical system is up to date and how long the appliances should last. They can't report on things they can't see, they are the experts and will undoubtedly save you money by noticing things that the average Joe would not. So don't pass just to save $300-$400; that's money well spent.
7. Hire Just Any Agent to Sell Your House: All real estate agents are not the same. You want to look for those who specialize in your neighborhood and are top producers. Ask your candidates how they plan to market your house, if they will stage your home with you and what they think your home is worth. Compare different market analysis from different agents and see which one is on the mark for price. Some realtors will tell you what you want to hear in order to get the listing and then 3 months down the road convince you to lower your price to a more saleable number. Look for a realtor that will give it to you straight and above all, stay away from relatives. Unless Aunt Bessie or Nephew Nick fit the description above, keep looking.
8. Fail to Check Out a Remodeler: Never, ever hire a contractor who knocks on your door or says his prices are good for only a few days. Reputable remodelers don't solicit door-to-door, and they don't cut prices just because they happen to be in your neighborhood. Check out a potential contractor thoroughly by calling several of his past clients, your local better business bureau, his bankers and suppliers, and your local consumer affairs agency.
9. Pay Too Much Upfront: If a contractor asks for more than 1/3rd of the contract price as a down payment, chances are something's wrong. He could be a scam artist who has no intention of returning after he cashes your check. He could also have underestimated his costs and can't afford to purchase materials on his own. Or, he could be using your money to pay workers on another job. Never give contractor cash, either. This is from personal experience!
10. Burn Your Mortgage: It's a wonderful feeling when you make your last house payment. After all, the place is now yours, all yours. Many people celebrate by holding a mortgage burning party. But they torch the original document. Don't. Make a copy and burn that instead. Keep all your loan docs in a safe place!
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$500.00 dollar discount to anyone that sells their home through me and another $500.00 discount to anyone that buys through me. Total of $1000.00 savings. Deanna Greenwood can assist you with 1031 exchanges and finding foreclosured property. She also specializes in lease options. Please feel free to contact DeAnna Greenwood with any questions or concerns you may have. I am here to meet your real estate needs, whether you are buying or selling a home. Your privacy is my utmost concern. I will never sell your personal information. Call DeAnna Greenwood |
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10 Common mistakes