A mortgage can be your best option for a given financial situation. However, the different conditions each deal provides can be tricky. If you’re applying for a loan under a mortgage dweller, take note of these things in order to avoid mortgage application traps:
So-Called Honeymoon Rates
Newlyweds are often on cloud nine following their wedding celebration.The idea of moving into a new house after tying the knot excites them. Unfortunately, when it comes to applying for mortgages, newlyweds are most vulnerable toso-called honeymoon rates.
To save yourself from these mortgage traps, know that lenders have the knack of pushing “convenient” offers that you will find difficult to refuse. The honeymoon rate is a tactic that leads to ultra-low rates for a housing loan. To help you better understand how this rate works, here are some guidelines:
- Theserates only tend to be active for very short periods of time. It could be a year or even less.
- These rates, after that period, skyrocket to extremely high ratesof Newlyweds are then forced to pay more than what they’ve initiallybargained for.
Avoid honeymoon rates at all costs. If you want to take one, make sure you meet the payment requirements ahead of schedule and pay on time.
Avoid Complex Rules for Fixed Rates
Things can get confusing when lenders begin toexplain specific mortgage terms. But, don’t panic. Never sign-up for mortgage deals, you do not entirely understand. Take the time to study the rates that come with every deal, so you know the best way to approach your current situation.
TIP: You know something’s not right when the mortgage rate has fixed rate rules that tend to be too complicated.
- Traditionally, lenders allow borrowers to pay a certain amount on a fixed rate loan. However, when lenders begin to apply very complex rules with their fixed rates, be alert.
- They use terms like fixed years, which are incredibly different from calendar years. This leads to miscommunication, and borrowers now are stuck with payment schemes they didn’t anticipate.
TIP: Communicate terms with your lenders cautiously. Write it down, or record things if you must. Evaluate your lender’s purpose in discussing a mortgage plan. Know your legal rights in a mortgage trap to avoid draining your wallet.
Too Good To Be True Rates
Some lenders showcase unrealistic rates to catch our attention. These are usually small-time lenders that have little customer reviews. However, for some reason, they are very capable of offering housing loans to anunsuspecting buyer. Here are signsyou might be talking with a bogus lender:
- They are awkward and tricky. Their aim is to wow you with offers you cannot quickly turn down. Don’t buy their techniques and take the necessary precautionary measures when dealing with rates that are way too good to be legit.
- They make updistinctions from other lenders by charging you outstanding transaction fees and account management payments.
No Internet Banking Whatsoever
In today’s age of digital commerce, the internet is a platform manydealers and lenders use to conduct transactions. However, there are lenders that do not offer internet banking or ATM usage, which sometimes doesn’t make sense in this digital economy. Here’s why lenders who do not digitalize transactions can be risky:
- They tend to misplace documents and cancharge things that are beyond your responsibilities as adebtor.
- If they don’t offer internet banking services, they might be scamming you.
In any business transactions, always be vigilant.
Slow Processing of Payments, Improperly Assessed Preapprovals
When you choose your lender, always ask them how they get your payments in check. Always look for a timespan when these paymentsare reflected in your report. Make sure you have some form of guarantee that they will remain true to their word:
- Know the duration required to process payments. Remember, settled dues that are not immediately reported canadd interest for days your payment is not recognized by the credit system. Make sure these days are well-accounted for.
- Check if you can receive a formal pre-approval loan from the lender in question and if it is adequately Sometimes, lenders do not get to review their applications correctly. Specific deals reach expiration, and you could end up not getting any mortgage at all.
Conclusion
Applying a mortgage can be your best solution when dealing with your financial woes. However, be very careful when assessing your mortgage plans and applications and only use trusted lenders on this list https://aaacreditguide.com/best-mortgage-lenders/. It only takes one mistakefor you to end up in worse economicsituations. Always consider making the application a part of your long-termfinancial plan so you can be successful.
Have you tried applying for a mortgage? How was it? Feel free to share your experience with other readers below.
