Common Mistakes Made When Getting an Arizona Mortgage

When looking for an Arizona mortgage loan, there are some common mistakes that many people make. This is because there can be a lot of pressure to hurry through with a mortgage, and many things are forgotten, or you do not get the best deal you could have on your home loan. There are five common mistakes that people looking for Arizona mortgages make: not asking for Good Faith Estimates, choosing a mortgage company based on rate only, waiting on homeowner’s insurance until the last minute, putting off providing your information and getting the wrong type of mortgage.

1. Not getting a Good Faith Estimate.

When shopping around for a mortgage, it is possible to get what is called a Good Faith Estimate. This is a documented estimate to back up their rates and fees. Shopping around with reputable lenders means that you will have actually forms with a documentation that you can use to compare information. One of the most important bits of information is located in section 800 of the Arizona Good Faith Estimate: lender fees. Make sure you compare these carefully and look at the offered rate.

2. Looking only at interest rate.

While the interest rate you get on your mortgage is very important, there are other factors to consider. Some cut-rate lenders may not be located in Arizona, and may be slow to serve you or approve your mortgage. Additionally, it is important to look at what kind of home loan the quoted rate is attached to. An adjustable rate mortgage may have the lowest rate right now, but it could easily go up later. Look at the whole picture, and whether or not closing costs, points and fees would ruin the advantage of a slightly lower interest rate.

3. Getting homeowner’s insurance at the last minute.

In Arizona, you need to have homeowner’s insurance in order for your mortgage to go through. Many people forget to begin shopping for homeowner’s insurance as early in the mortgage process as possible. This way, you will be able to shop around for a better rate, and you will avoid delays in the final approval and processing of your home loan.

4. Not providing information quickly.

It is important that you answer questions and provide information and documentation as quickly as possible when applying for a mortgage. The longer you take to gather what you need, the longer your home loan approval will take. Expired locks and missed closing dates can be some of the results of this. Some documentation that you might need for a home loan include: two most recent years of W-2 forms,most recent 30 days worth of paystubs, purchase contract and copy of earnest money check, statements for any liquid asset accounts (checking, savings, 401k, IRA, etc.), homeowner's Insurance agent's name and number.

5. Getting the wrong type of mortgage.

Home loans are not one size fits all. You need to find a mortgage that works for you. Many people, even when they are planning to stay in a house for only 5 years, opt for a 30-year fixed rate mortgage. This is not the best option when staying for so short a period of time. An adjustable rate mortgage might actually be better, since the rates are usually lower. If you are staying for a long time, though, a fixed rate is the way to go, in order to protect yourself against rising rates.