When it comes to the financial side of owning a home, it is best to learn from others’ mistakes. There are some common costly financial mistakes that homeowners make, and I am sharing them with you so that you can avoid the consequences and make the right choices for your wallet.
- Not consolidating: While many people think they can pay off high interest credit or vehicle loans, one of the biggest mistakes they make is not consolidating these amounts into their mortgage. Making minimum payments can take many years to pay off, and is just not feasible when it comes to all of the expected and unexpected payments a homeowner has to make.
- Paying unnecessary fees: Some homeowners think they are getting a great mortgage rate, but they are actually paying a fee for that lower rate. Always look at the bottom line and figure out which rate will cost you less after you pay the fees, and remember that chasing rates isn’t always the best option.
- Not looking forward: When it comes to mortgages, it is always best to look long term at what you will be paying. While this is the case, it doesn’t mean that longer mortgage terms are better. Stick with 2-3 year terms to capitalize on your home equity and save money.
- Choosing a more expensive rate: Many homeowners opt for a 5 year option due to the seemingly better rate, when actually a 2-4 year term will offer better overall savings. The longer the term, the more money the bank will make, and often rates can change significantly in 5 years.
- Choosing a restrictive lender: Some homeowners trust their bank versus a mortgage broker to get them the best rate, but this can come at the price of high penalties and heavily restrictive contracts. A mortgage broker such as myself can often get you the same rate as the bank without the same risks.
Don’t make these mistakes with your new home! Contact me today to set up the best mortgage option for you and your wallet.