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Francis Vayalumkal
Finance | Financial advice

Avoid mistakes when mortgage hunting: Cool and calm home buying
By Francis Vayalumkal

Buying a home is anything but boring. It can be filled with excitement as well as uneasiness. The more you know about navigating the mortgage maze, the more thrills you can keep in the process while reducing the apprehension. The biggest mistake that many potential home buyers make is to begin applying for a mortgage without a clear picture of their credit situation.

If you know you will be buying a home soon, it may be helpful if you get a copy of your credit report and FICO score (FICO stands for Fair Isaac & Company and is the name for the most well-known credit scoring system, which is used to estimate credit worthiness) several months before applying for a mortgage. This will give you time to take care of errors that you may discover on the report as well as prepare for any challenges you might face in getting the mortgage with the best terms.

Once you are aware of your credit score and know whatís on your credit report, youíre ready to apply for a home loan before even looking at homes. No, thatís not in the wrong order. Having a pre-approved loan will give you positive leverage with home sellers and real estate agents.

After being approved, you will have to avoid any activity such as opening another credit account that could jeopardize your final loan approval. Most mortgage companies will check your credit again at closing, and if they see new credit activity, they may determine that youíve added too much debt and decide not to grant you the loan.

There are a variety of mortgage loan programs available in the market today. You might hear details about a loan program that your friends or family members have. Talk to your mortgage consultant to see if the loan program you would like to choose is appropriate for your financial situation, future plans, etc. With options such as interest-only, 1 month, 6 months and 1-year adjustable or 5/1, 7/1 ARM programs, it can be confusing.

Some other mistakes buyers make while negotiating the mortgage maze are taking out a bigger loan than they actually need and not budgeting enough money for closing costs or for the first year of homeownership.

Another expense home buyers forget to plan for is closing day. To prevent a financial jolt on that day, meet your mortgage provider beforehand and ask for an estimate of costs at an early stage of the loan process. You can then plan ahead for the identified closing costs, which will probably include such things as taxes, title insurance, homeownerís insurance and other lenderís fees.

If you have a hearty reserve, you can address any problems as well as make your first mortgage payment without feeling a pinch. A little planning can put the excitement back into buying a home.

Francis Vayalumkal is a loan officer at Market Street Mortgage and can be reached at (813) 971-7555 or via e-mail at

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