People are constantly making mistakes when it comes to home financing.  Whether it’s a refinance or a home purchase, there are certain precautions to take to make sure you end up with the best loan product for your situation.  It is similar to the instinctive process of finding a mate. 

It’s far too common for people to look at one rate, one term, and pull the trigger.  Shop around!  You don’t talk about kids and a white picket fence on a first date.  Why?  Because you do your research, and make sure she (or he) is the right one.  Sure, she might seem perfect.  But when you meet all eleven of her cats, you will most likely begin searching elsewhere.  Mortgages vary just as much as people, so be sure to look as many places as possible for the best rate/term package for you.

Be sure to check your credit score BEFORE you apply for a loan.  Have you ever walked into a first date without rehearsing at least a few of the inevitable questions? Of course not – because you want to seem eloquent.  You want to know yourself.  Before applying for a mortgage, you need to know where you stand and the products that will be made available to you.   Check out AnnualCreditReport.com for a free lesson in your credit history (and E-harmony.com for an expensive lesson in who you’re compatible with).

Another common error is falling in “love” with a house and signing up for payments you can’t afford.  Your monetary position dictates where you live, not vice versa.  We all want to date that tall blonde, but her infatuation with Italian leather and German sports cars limit those who actually can.  Having easily affordable house payments will keep you from worrying down the road (and, God forbid, foreclosing).  Getting a pre-approval letter from a lender like CapCenter will help you avoid this dating (and lending) pitfall.

Finally, be sure to get a written offer from your lender.  While you can be sure an offer from CapCenter is accurate and above board, you never want to be assaulted by a pack of nasty surprises at the closing table.  Like an air-tight prenuptial agreement, you want to know what‘s being promised is what you’re getting.    You should never be caught off guard by your mortgage lender, either.  

In sum, you know you won’t get seriously involved with someone without doing your due diligence.  Getting to know their personality.  Learning about their passions.  Analyzing their facebook account.  Whether it’s for a refinance or a home purchase, the same amount of care and precaution needs to go in to finding a mortgage.