Avoid These 5 Mistakes if You Plan to Buy a Home in Connecticut
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Buying a Home in the Connecticut Area? Avoid the 5 Biggest Mistakes a Home Buyer Can Make
Your Connecticut Mortgage Company has some tips to avoid the 5 biggest mortgage mistakes home buyers typically make. Whether you are a first-time home buyer, or you're moving to another town in Connecticut, your CT Mortgage Companyis here to help! If you avoid these common mistakes, buying a home can be a positive experience. Contact your Connecticut Mortgage Company today for more details.
A mortgage is often the single biggest loan someone obtains in his or her lifetime, typically costing tens of thousands of dollars in interest alone. Therefore it’s especially important to avoid some of the key mistakes that many home buyers make throughout the process of finding a lender and acquiring a home loan.
Here are five of the biggest errors home buyers make when obtaining a mortgage:
Having Unreasonable Expectations
Home buyers often look at only the mortgage payments for their dream homes and think they’re affordable. But it’s important to calculate the mortgage payments, as well as the taxes and insurance. Many lenders want these total housing costs to not exceed 30 percent of a borrower’s gross income. Home buyers should get preapproved for a loan before they start shopping to understand how much house they can afford.
Not Shopping Around
While 1 or 2 percent may not sound like a large amount, when it comes to a mortgage, the difference adds up. Consider: Home buyers who get a $300,000, 30-year mortgageat a 4 percent interest rate pay about $215,000 in interest over the life of the loan; home buyers who get a mortgage for the same amount but at a 5 percent rate pay about $64,000 more in interest over the life of the loan, despite only having an interest rate that’s 1 percentage point higher. It’s important for home buyers to shop around for reputable lenders offering low interest rates and low closing costs. Borrowers typically pay between 2 and 5 percent of the purchase price of the home in closing costs.
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