A Florida mortgage is the biggest financial commitment most of us will ever make, and you need to take it very seriously. Mistakes could cost you tens of thousands of dollars in higher interest rates, or even disqualify you for loans. Here are some mortgage do’s and don’ts that you need to remember:

DO

  • Establish a credit history. In general, you’ll need at least three lines of credit with a minimum of two years of history on each. Many people avoid credit, but without documented credit, you’re at a disadvantage with lenders.
  • Make sure you’ve got two consecutive years of employment. Lenders want to know that you’ll be able to pay them back.
  • Figure out how much you can afford before you start looking. Getting pre-qualified or pre-approved can save you a lot of time and avoid disappointment.
  • Shop around for your mortgage. You wouldn’t buy a car or a computer without comparison shopping, so make sure you find the best deal.
  • Lock in your mortgage rate. An adjustable rate mortgage (ARM) can go UP as well as down, and that could cost you dearly. There are some situations where ARMs make sense, but make sure you know exactly what you’re getting into.

DON’T

  • Make late mortgage payments. These show up on your credit report and can disqualify you with some lenders. And though it typically goes without saying, don’t declare bankruptcy or foreclosure if you can possibly avoid it. You won’t get a mortgage for several years.
  • Apply for a mortgage without 12 months of documented housing history. Lenders want to know you have a stable track record for your housing. However, if you do not have 12 months of documented housing history, but instead have been putting that money into savings, that could replace the 12 months of housing history. For example, if someone lives with their parents and doesn’t pay rent, and has evidence of savings over that period of time (for a new home), would work.
  • Apply for a mortgage with collections and charge-offs on your credit report. Many of these things can be fixed. Check your report regularly and dispute any issues.
  • Open new credit cards or borrow large sums before and during your mortgage application process. Changes in your debts and/or income could disqualify you.
  • List your property for sale and then try to refinance when it doesn’t sell. Lenders will check Multiple Listing Services (MLSs) and they often don’t want to loan money on a property that you don’t actually want.

If you have questions about the things you should and shouldn’t do when shopping for a home, please browse our website, or call 407-733-6425. We can provide you with helpful advice and suggestions to help you navigate the home buying process and help you obtain a Florida mortgage. Call us today.