5 Mortgage Mistakes To Avoid | First Time Home Buyer Guide

5 mortgage mistakes

"Mortgage" might just be the scariest word in the English language. While a mortgage is an antecedent to the American Dream, having the wrong information, a lack of help, or misconceptions can lead to financial ruin. With the United States life expectancy currently sitting just under 79 years, a 30-year mortgage currently represents around 40% of the average American lifespan! The Champagne & Parisi Team is dedicated to the end-to-end process, including accessing the very best in mortgage support. We bring the knowledge, effort, and right people to the table with every client, and through our blog strive to provide quick and easy reads to help you buff up your knowledge. Without further ado, here are 5 mortgage mistakes to avoid as a first-time home buyer.

searching for a home first

Looking For A Home First

Look, we get it! There's nothing fun about shopping for a mortgage. Looking for your dream home, on the other hand, is something we can all lose an hour or two fantasizing about. After all, mortgages don't come with swimming pools, a screened-in lanai, or access to the best restaurants and bars in the area. Mortgages, however, facilitate all of this. Without a mortgage or a boatload of cash, your home shopping adventure falls flat. Housing inventory is significantly limited, especially in our booming South Florida market. Not only is speaking to a lender the first logical step in the process, but it will also ensure you can act quickly should you find the perfect match.

opening new credit lines

Opening New Credit Lines

That big Christmas bonus just hit, and you're doing quite well. As your income and assets rise, so do the temptations to enjoy the finer things in life - such as a new car, boat, or major life upgrade. Even in the form of an additional credit card, however financially viable, these new credit lines can shake up your foundation in the eyes of a lender. Regardless of your financial aptitude, a lender doesn't live in your shoes and is looking for not only resource-richness but consistency and stability. Your capacity to pay these assets down is less important in the early stages with your lender than showing stability and control will be in the short term. When looking for a home, but everything else is on hold and keeps your slate clean.

hidden closing costs

Neglecting Closing Costs

This can occur in so many forms. One of our lenders once told us a story of someone who didn't take into account that the prior resident of their new Boynton Beach home was a veteran, and thus had significantly lower taxes among other VA benefits that impacted the overall cost on the home. This buyer neglected the inevitable steep hike in property taxes that would ensue once a non-veteran inhabited the home, and they nearly went upside down on their mortgage. A good lender will work tirelessly to ensure you have as much knowledge as possible before making a decision, but oftentimes the hubris or overeagerness of a first time home buyer can lead to ruin over the slightest cause.

internet pre qualification

Relying on Online Pre Qualification

Have you ever heard of BMI? Body Mass Index or BMI is one of the most misleading numbers in personal health. With BMI, a bodybuilder could be labeled unhealthily overweight, while someone of the slight but proportionate build could be deemed deathly ill. Long story short, these internet calculators and pre-qualification forms should be a cursory indicator of your mortgage viability but are never to be trusted as a means to truly gauge your capacity to take out the mortgage for the home you're looking for. Much like WebMD can't tell us what our doctor can do, these sites are helpful, but cannot be relied upon to paint a clear picture of your mortgage pre-qualification.

local lender

Using a Non-Local Mortgage Company

It wouldn't make much sense to use an out-of-town Realtor to shop for your Boynton Beach home. It's time to view our mortgage lenders as partners in the process just as much as our Realtors are. They are just as essential to buying your home as any cog in the machine. Working with local mortgage lenders also leverages existing relationships between Realtors and lenders, much like Realtors and plumbers, electricians, and other much-needed local entities. These lenders will know the market, the properties you are searching for, the hazards to be wary of, and the people to connect with. Let the lender advocate for you!

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