Most Common Mistakes People Make With Their Finances

Using your money efficiently and investing it in the right place is a vital component to planning a bright future. Failing to do so could have a profound impact on your life. Especially for those who are considering buying a home in the future, strong personal finances are of utmost importance in the run up to applying for a mortgage.

Although personal finance management is something everyone has to deal with at some point, there are very few schools which teach these important skills to successfully manage finances. To help avoid a stressful situation while house-hunting, here’s a list of most common mistakes people make with their finances when trying to obtain a mortgage.

Not knowing your credit report scores. Many people think they are ready for a mortgage but often their credit report shows otherwise. Perhaps it’s been misinformation they have received over the years, new mortgage rule changes or simply an assumption. There could be hidden skeletons on your credit bureau you were unaware of. For example, did you know collection company can sell your unpaid collection to another company which starts your "time served" all over again? If you are thinking about buying a house, contact a licensed mortgage broker in your area to find out how you would qualify. There are several factors that a licensed professional will look at to increase your chances of getting the best mortgage when you need it.

Being uninformed or misinformed of the new benchmark rate. A recent change that has been in the media since October is the new qualifying benchmark interest rate. Today the qualifying rate is 4.84%. This means the lenders on a high ratio mortgage must qualify the mortgage at the benchmark rate and not the contract rate. Knowing the current benchmark rate to qualify at will ensure you are looking at the homes in your price range.

Not consulting a licensed mortgage broker. There are many people still walking into the bank branches when dealing with a licensed mortgage broker allows you the ability to shop the marketplace. A bank only offers the products from their particular institution whereas a licensed mortgage broker will guide you and be able to offer more than one bank’s products. A mortgage broker helps you find a mortgage that may be more suitable to your needs now and in the future.

Relying on the bank to complete a transaction. Many people choose to work with banks and rely on them to complete their transaction which could take time. To quicken the process, work with an experienced mortgage broker who will find a way to complete your transaction in the fastest possible time frame.

To avoid these common mistakes when looking for a mortgage, reach out to the experts at Universal Mortgage Solutions With over sixteen years of experience in the mortgage industry, they strive to offer their clients great mortgage rates as well as sound, unbiased advice to create a mortgage strategy which fits their budget. They provide re-financing and renewing, home buying and reverse mortgage services in Red Deer and Central Alberta. To learn more about Universal Mortgage Solutions, please click here.