Sometimes it seems like the hardest part of home ownership is finding the home. While that’s certainly a challenge, applying for and being approved for a loan can sometimes bring its own set of complications – especially if the lender you’re working with isn’t a trustworthy individual. In an ideal world you’d be able to rely on your lender for their home loan advice, however, you don’t always know if you’ve chosen an “unprofessional” lender until it’s too late.
Below are some home loan advice tips to keep in mind as you work through the financial aspects of your home purchase and loan applications. These “tips” could save you from making a costly mistake or falling prey to scam.
- Your credit score will definitely affect your loan application and interest rate, so if someone is telling you otherwise and offers you a deal that seems too good to be true, beware. Get everything in writing, and make sure you talk with other lenders and financial advisors just to be safe.
- Conversely, it’s always good to talk with several lenders – not just to ensure you find the right one who has your best interests at heart, but also because you never know when and where you might find a better deal. Yes, shop around.
- Make sure you’re aware of any prepayment penalties, which is a fee charged to a borrower if they decide to pay off the loan early. It’s preferable to choose loans that don’t have this provision. Your loan documents are legally binding. Ensure all the information on them is accurate and true and beware of anyone who suggests you do otherwise, or offers to help falsify the information. You are certifying under federal law to the accuracy of your information.
- Ensure that your loan documents are accurate and fully completed (no blanks) before you sign your name to them. If there’s information missing, don’t sign – wait until every form is complete.
- Be certain you know about all your mortgage fees, and question anything that doesn’t seem or feel right. You have a right to full disclosure, and additional fees aren’t always a part of the process. Exercise your rights and challenge any item you didn’t request.
- Get written estimates for all fees, and compare your APR with the loan’s interest rate to ensure you’re getting the deal you agreed to.
- Find a HUD-approved credit counselor to help you navigate through the loan process. Get the facts – especially if you’re considering rolling other debts into your mortgage loan and identify the true cost of the loan.
Above all else, trust your instincts. If it doesn’t feel right, don’t sign. Get counsel from a reputable financial source that can help you make more sense of your situation so you make the choices that are right for you.