Stockberger: 4 Home Loan Mistakes That Could Cost You a Lot

There is nothing like the moment you find the home of your dreams. It’s easy to get caught up in the excitement and take steps to finish everything as quickly as possible. And while punctuality is important, it can lead to mistakes that end up costing you thousands of dollars.

These are the four biggest mistakes people make when getting a home loan.

It’s tempting to go with the first mortgage offer you receive, especially when you’re eager to close the deal on your new home. According to a LendingTree study, the majority of people, 54 percent, do just that: they receive only one offer.

Jacob Channel, senior economist at LendingTree, explains why this is a mistake.

“Different lenders may offer different rates to the same borrower. With this in mind, the first rate you are offered may not be the lowest you can get. The more offers you can see, the better.”

Think about it: If you go to just one store to compare prices, won’t you miss out on potential savings? The same goes for mortgages! Different lenders offer different rates, and even a small difference in interest rate can translate into significant savings over the life of your loan. The same LendingTree study found that 45 percent of those who shopped around for a mortgage ended up with a better deal. This means that almost half of shoppers who took the time to compare multiple offers saved money.

It’s great to trust your real estate agent’s recommendations. After all, we work to build strong relationships with lenders and suppliers to better serve our customers. However, if your agent recommends only one lender, it may limit your options. Each lender will have different options and tools for obtaining a mortgage.

Try to get at least two mortgage offers to compare. Diversifying your lender options can help you find competitive rates and better terms.

Not all mortgage loans are the same. Beyond the typical 30-year fixed-rate mortgage, there are several types of loans, such as adjustable-rate mortgages, FHA loans, VA loans, and USDA loans, each with their own advantages and disadvantages. Ignoring these options could mean missing out on a loan that might better suit your financial situation.

This is another reason why it’s important to shop around. Each lender may have access to different types of loans. Discussing all of them will help you understand which one best suits your circumstances.

When choosing a mortgage, consider your long-term financial plans. Do you plan to stay in the house for a long time or could you move out before the 10 years are up? This may influence which type of mortgage loan (i.e. fixed or adjustable rate) is a better option for you. Also, think about how your income might change over time and whether you might want to make extra payments to pay off the mortgage faster.

Try to align your mortgage choice with your financial goals to ensure you make the most strategic decision.

Getting a mortgage loan is an important step in the home buying process, and avoiding these common mistakes can save you time, money, and stress. Remember, it all starts with shopping! By doing so, you’ll be well on your way to getting the best mortgage deal possible.

Need recommendations on vetted mortgage lenders in Sioux Falls? At Amy Stockberger Real Estate, we have a network of trusted Home Support Team lending partners who can offer you preferential treatment and competitive rates. Contact me and I’ll set you up with one of our trusted partners, ensuring you get the best mortgage deal for your dream home, or check out all of our home support team partners here.

Our lifetime home support model ensures that you have access to a dedicated home support team at every stage of your home buying and selling process. From getting the right mortgage to getting in and out, we’re here to provide you with ongoing support and valuable resources. Contact us today to learn more about how we can help you achieve your homeownership goals with ease and confidence.