5 Borrower Mistakes - Common Mistakes and How to Avoid Them
Whether this is your first loan or your hundredth, these are some common errors buyers make when getting a loan.
- Searching for a home without being preapproved. As a buyer competing for a property, you have the best chance of getting your offer accepted by showing that you are as prepared as possible.
Note: Pre-Approval is different than Pre-Qualification - see Getting Pre-Approved for your Loan for more on the difference between the two.
- Selecting a lender because they advertise the lowest rate. Don't get caught in the rates game. It is important to know all the costs of a loan and when a lender is just using clever advertising. There are more than a few shady lenders out there drawing in people with rates that either don't tell the whole story or that they won't actually offer you.
- Not evaluating the Lender properly - Most people have no idea what really matters when choosing their lender. Instead, they rely on interest rates (see above), or the first lender they meet or hear about. Your goal should be getting a loan with the minimum cost and hassle and maximum benefits.
- Not getting your information to your lender on time - Without the necessary information, your lender can not do their job. Often people think that their work is done after they've met with the lender. Remember that you are partnering with your Lender and Realtor. If you have chosen this team correctly, they will work hard for you - just don't forget to do your part.
- Not receiving a Good Faith Estimate. You should receive a written statement of fees associated with your transaction within three business days after the lender receives your loan application. This is both the law and the best way to know what you will pay for your loan. Take your Good Faith Estimate (GFE) with you when you sign loan documents. You are not expected to pay fees which are substantially different from those contained in your GFE.