Are you in the market for a new home? If you have been talking to friends and family or researching online, you have likely come across quite a bit of mortgage-related advice. As with anything, there is low-quality advice out there which is essential to avoid. In today’s blog post we will share four pieces of mortgage-related advice that you should take with the proverbial ‘grain of salt.’
#1: Only Get A Mortgage From Your Bank
Have you heard that you should only get a mortgage from the major bank that you use regularly? Many people believe that working with a large bank that you have a history with provides advantages, but this is not always the case. The right advice here is to seek out a mortgage lender offering products that fit your current and future financial needs.
#2: Always Take The Lowest Interest Rate
The next piece of advice you might hear is to always take the mortgage product with the lowest interest rate. As you may know, rates vary based on a wide range of factors. Taking the lowest rate might mean that you miss out on some favorable mortgage terms. It is best to trust your mortgage professional to provide you with some options here.
Don’t forget that, over time, you will be able to refinance your mortgage if rates move in a way that is advantageous for you. So you can feel safe in choosing the right mortgage now and adjust later.
#3: Always Borrow As Much As You Can
Another questionable piece of mortgage advice is to always borrow as much as you possibly can. Keep in mind that a mortgage is a loan and that you are required to pay it back. The amount you borrow should be in line with your needs and financial goals.
#4: Don’t Bother With A Pre-Approval
Finally, you may have heard it suggested that you can avoid the mortgage pre-approval process. While it is possible, this is not a good idea. Many home sellers will require proof of your pre-approval before they will commit to selling their home. If there are other buyers trying to bid on that home, they are more likely to win the bid if they can prove their finances are in order. When you are ready to buy, a pre-approval can help.
These are just a few of the many bad pieces of mortgage advice that you might hear in conversation or read online. When you are ready to discuss your mortgage options with the experts, give our professional team a call. We would be happy to share our insight and experience to help you choose the best mortgage.
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About the Author:
Babak Moghaddam graduated from University of Southern California in 1985. He entered the mortgage industry as a compliance auditor at the Bank of New York in 1986 and completed his masters in Business Administration two years later. After seventeen years in the traditional mortgage banking world Babak finally transformed this vision into his own practice in 2002 when he formed Charter Pacific Lending Corp, a mortgage company that has provided over $900 Million in residential real estate loans throughout Southern California. Babak and his team do things a little differently than other mortgage providers. They work as financial advisors, because they have come to realize that a mortgage is a very powerful financial tool. And just like any other financial tool, it should be managed as part of the overall financial management plan to reach every home owner’s long and short-term financial goals much faster. You can contact Babak for a free consultation and strategy session at (800) 322-1217 X103.