Bad Mortgage Advice We Wish Would Go Away

Posted on 8th December 2016
Tags: below your means, dream home, finances, house poor, loan, pre-approval,

Applying for a Mortgage Isn’t Always Easy

Mortgages, by their very nature, are complicated. Many homeowners and prospective homeowners might not have the strongest foundation of knowledge on which to base decisions, and even those who do might have wrong information. When it comes to applying for a mortgage, there’s a ton of differing opinion.

Bad Advice Might Steer you in the Wrong Direction 

A quick Google search for anything to do with mortgages will quickly reveal contradicting opinions. How does someone looking for a mortgage approval sift through the bad advice and come to a solid conclusion? Remember, you don’t need a license or accreditation to share an opinion on the web.

Let’s look at some common mortgage advice that you might want to ignore:

the-right-way

#1: Getting a Mortgage Pre-approval Offers No Advantages

This tends to be a popular one and is simply not true. Some claim that you’re too early in the process or that it’s not official so why bother. The truth is, a pre-approval can make you more attractive to a seller if there are multiple bids. In addition, it gives you a framework on what you can spend.

#2: The Fine Print is Just Legal Mumbo Jumbo

Once you’re approved for a mortgage, there’s a lot of legalese that you’ll have to sort through. While it might feel daunting, there’s important information in there, and it shouldn’t be dismissed. Don’t think of it as fine print, instead, think of it important clauses that could make or break your deal.

fine-print

#3: Avoid Being “House Poor” by Paying the Least Amount Every Month

Another common one is to avoid bi-weekly payments or accelerated payments or try to amortize over 30 years instead of 25 years. All of this can drag your mortgage out whereas fewer years and accelerated payments can chop months if not years off of your regular payments.

#4: Take Every Penny Offered by the Bank

This might be a tough one to ignore since it sounds so enticing, but it’s not sound advice. You need to stay within your budget and shop accordingly. You can enjoy life and find your dream home for a bit below your means, and this way, you can continue to save or top up your emergency fund.

This list could be a lot longer, but the point is, you need to consider all of the advice given to you and to choose what is best for you and your finances. The best piece of advice might be to do your research, be diligent and trust the experts.

Speaking of experts, if you want sound mortgage advice, contact Canadalend today.