Bad Mortgage Advice People Actually Believe

Revealed: Bad Mortgage Advice People Actually Believe- 3 of The Worst

Landing a mortgage is, undoubtedly, a daunting prospect. This, perhaps, explains why so many people are always willing to offer advice on the subject. Sure, some of the advice may be well-intended but more often than not, such suggestions may not be necessarily beneficial to you. In fact, they could be well off the mark. Therefore, before taking such friendly counsel as the gospel truth, ensure that you check it against some of the worst mortgage advice peddled around. Below, we take a look at 3 examples of such ill-advised mortgage advice as follows:

1. Source your mortgage from a bank where you already have an account
One of the reasons why you are likely to hear this is because when it comes to convenience, you are unlikely to find a better bank than the one you are currently using. In addition, since you already have an established relationship with your bank, they are likely to offer you the best rates, right?
Well, this is not always the case. Even though the bank where you keep your savings and checking accounts may claim to give you an easier application process and better service, you are likely to find more favorable terms at other venues. Since you already know how to shop around for a home, it is advisable that you do the same with your loan and always be on the lookout for the most favorable terms.

2. Pre-approved mortgages are unnecessary
This is another falsehood that you are likely to encounter, especially at the outset of shopping for a home. Why get all serious about a mortgage when mortgage pre-approvals are not a surety that you will get one as the applications are not reviewed by an underwriter?
While it is true that a pre-approval may not be official, you are likely to avoid major problems going forward. This is because getting pre-approved by a lender is one way of avoiding the heartbreak that comes from falling in love with a home that you can never buy. Additionally, if there are multiple offers for the same property, a seller will feel more comfortable dealing with someone with a mortgage pre-approval as opposed to someone who is yet to begin the process.

3. Ignore the fine print
It is easy to fall into this trap because actually taking the time to peruse all the mortgage paperwork can be quite taxing. Further, you may wrongly assume that it is the standard contract that is presented to everyone and all you need to do is to sign on the dotted line and you save yourself from a ton of headaches.
Nothing, however, could be further from the truth as the fine print may contain clauses that could cost you a lot of money down the road. It is highly advisable to take time and go over every word with a fine-toothed comb because even though it may take you several hours to go through the contract, whatever issues may arise can be easily ventilated with your lender. This process may take a little longer but in the long-term, it is well worth the wait.
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