Expensive Mortgage Mistakes To Avoid At All Costs.



Posted on: 28th January 2015

It’s hardly commonplace for anyone these days to rush blindly into a mortgage without carefully considering every aspect of the decision beforehand.

At the same time however, there are certain mistakes and pitfalls along the way that are not only quite common, but can prove quite enormously costly.

With limited or no prior experience at all of the ins and outs of mortgages, it’s difficult to know which of the apparent moves you’re making are right and which could do with a strong re-think. However, speak to an independent financial adviser and chances are they’ll highlight the following key examples, while at the same time ensuring you stay clear of each of them:

1 – Diving Into Adjustable Rates.

Adjustable rate mortgage deals often turn out to be the kinds of too-good-to-be-true offers you ultimately wish you’d had no part of in the first place. It all depends on the individual circumstances regarding the property purchase at the time and a variety of economic conditions, but to opt for an adjustable rate mortgage without sufficient prior thought is to take a pretty huge gamble. As such, the ARM approach to buying isn’t to be approached without prior advisement.

2 – Ignoring Your Credit History.

Your credit report can make a world of difference to the kinds of mortgages you’re offered access to and the rates you can expect to pay if and when approved. As such, it’s of crucial importance not to ignore your credit report prior to going about the mortgage application process as it may be in your best interests to first get your credit report in order. And if this isn’t an option, it might be necessary to stick only to those lenders that specialise in mortgages for poor-credit borrowers.

3 – Choosing a Zero-Deposit Deal.

In some instances, a buyer may have little to no choice other than to go with a zero-deposit deal, having no realistic means of saving up the necessary funds. However, those able to produce a deposit should not necessarily look upon no-deposit deals with preference as the lower the deposit paid, the higher the likelihood of interest rates and additional fees augmenting the cost of the deposit several times over. The more you owe by way of monthly repayments, the more interest you’ll pay over the full term of the mortgage.

4 – Overlooking Shorter-Term Mortgages.

Most borrowers instinctively gun for 30-year fixed rate loans and never think twice about their decision. However, in many cases it may be entirely possible to manage the slightly higher monthly payments associated with a 25-year, 20-year or even a 15-year deal – all of which could lead to a small fortune being saved over the mortgage term.

5 – Not Shopping Around.

Last but not least, it’s easy to be wooed by the very first lender that takes kindly to you and offers you a deal that’s well within your reach – especially if they make it a ‘limited time’ offer. However, by not shopping around you rob yourself of the chances to play these lenders off one another in such a way as to find what’s genuinely the very best package and the lowest price on the market.