Five Tips for a Happy Mortgage

Isn't it amazing how a little bit of effort can be the difference between success and a big mistake? As humans, we all commit errors from time to time. Some of these goofs are totally out of our control, but this post will focus on the ones that can be avoided with a little extra effort. Specifically, you will learn about five simple mistakes commonly committed either before or after acquiring a mortgage. It is our hope that by paying attention for a few minutes now, you could save significant time and/or thousands of dollars down the road! Plus, you can also avoid the dreaded "I told you so" later!


Your Credit Score Never Sleeps

We'll start with an obvious one: never push your credit score to the back burner. Missing even a single credit card payment can greatly impact your ability to qualify for the best rates on a mortgage for years to come. Even something as simple as opening or closing a credit card account around the time of your mortgage application could have negative effects, so avoid doing anything with credit implications until the ink is dry on that loan!

Bigger isn't Always Better

When shopping for a mortgage, you might assume that the safest and easiest thing to do is apply at a big-name bank. However, local banks can often provide similar or better deals while also having the flexibility to meet your particular needs. If you have unusual financial circumstances, this flexibility may be the difference between delaying your home search and closing the sale!

Speed is Key

Because they've been low for a long time, you might think that there is no rush on locking in a particular loan at the offered rate. However, it is important to remember that mortgage rates change daily. When applied to a sum as large as a home's purchase price, even a tiny fraction of an increase can equal major money over time. Therefore, you should always be sure to act fast on a good rate before it's too late!

Interest Rates are Always Changing

Now that you've bought your home, it's easy to make the mortgage payments and never think about the rate again. However, this is not a wise move. Major changes in the market could result in large drops in interest rates. These situations provide an excellent opportunity for you to refinance! Although this process is likely to involve several fees, a significant drop in interest accumulation will almost certainly pay for them and more over the remainder of the mortgage.

Avoid Minimum Payments if Possible

Similar to the last issue, it's easy to just always make the minimum payment so that you'll have more money in your bank account. However, additional payments toward principal can shave YEARS off a traditional mortgage! Of course, many people make the minimum payment out of necessity rather than choice, but if a chunk of money ever does become available you should think carefully about how to best apply it. Rather than splurge on an expensive purchase now, put that money toward the mortgage principal. There is a good chance that the money will come back to you as savings on interest. Similarly, making biweekly payments rather than monthly ones can reduce your accumulated interest by increasing payment frequency.

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