April 12th, 2012
In her blog post “Foolish Money Mistakes to Avoid,” Vera Gibbons highlights some of the big money mistakes that people make when it comes to housing. Here’s her list:
Trying to time the market. This is a big one. Professionals have been saying for a few years that it’s critical to take advantage of low home costs and mortgage rates now while you still can. A lot of people are thinking that, since this has been the case for a while, there’s no rush, and they’d rather wait it out and see if prices drop even further.
The truth of the matter is, no one can say for certain when prices will go back up. It’s a gamble. But as Gibbons says, and housing professionals will agree, you shouldn’t wait for the market to hit the bottom. As far as we know, it may have already happened. It’s only apparent after the fact, when it’s too late, and mortgage rates are on the rise again. So if you can afford to buy now, you should.
Only considering home prices. Looking at the mortgage rate is just as important as the home price. So, even if home prices continue to fall, rising rates could counter that.
Not knowing your credit score. If you’re shopping around, and you don’t know your credit score, you’re wasting your time. So much relies on credit, in terms of rates, and how much you get approved to borrow. Gibbons suggests using myfico.com for $19.95. Other free options include creditkarma.com, creditsesame.com, and quizzle.com.
Failing to research your loan options. A perk of using a mortgage broker over a bank is that a broker has access to more loan options, where a bank only has access to options offered by that bank. Weigh the pros and cons of each option, and don’t settle for one until you feel you have looked into each equally.
Not refinancing. Everyone should at least look into refinancing his or her mortgage. According to Gibbons, an estimated 14 million Americans are overpaying their mortgages by an average of $471 a month.
Call Acadia Lending today. We’d be happy to talk to you about refinancing, commitment free.