Below listed are some guidelines that must be followed while going for a mortgage loan.
The Dos:
1. Do check for credit reports well in advance before applying for a mortgage loan. Ideal period is to check your credit report every 6 months. This will provide ample time to the borrower to communicate with the credit bureau and get any errors and misunderstandings rectified, if any, in the report. Also, six months is sufficient to make amends in the credit ratings if the credit scores are low.
2. Do shop around. Due to an increased level of competition in the market, several lenders are now offering incentives with mortgage loans so as to attract customers. It is important to shop around for a mortgage lender offering loan at lower interest rates.
3. Do negotiate. It is important to negotiate the interest rates and other costs associated with the mortgage loan with the lender. This saves a good amount of money in the due course of time.
4. Do ask the lender to furnish detailed fees included in the closing costs. Most costs listed are not even required for every customer. It is important to have a clear understanding about these costs. One can even seek advice from a legal professional having expertise in real estate law.
The Don’ts:
1. Do not ever sign the loan agreement in haste. It is important to understand each and every point listed in the agreement before signing.
2. One should never make any assumptions. Everything should be clearly written on paper. It is important to get clarifications and answers for all your queries and questions regarding the mortgage loan. All these details should also be properly documented. Assumptions in case of mortgage loans can result in loss of thousands of dollars.
3. Do not abstain from making monthly mortgage payments. It is important to save some money that is equivalent to at least 3 months of monthly mortgage. This money can be used in case of emergencies.
4. In case of any trouble or emergency, where the borrower is unable to pay the monthly mortgage, it is important to contact the lender well in-advance. It is foolishness to wait until the lender sends delinquency or foreclosure notice. Many lenders have alternatives that are designed to help customers who are facing financial distress.