Mortgage California Blog

Mortgage Mistakes to Avoid and Other News

May 16th, 2013

Young happy couple shoppingMortgage Mistakes to Avoid and Other News

We’ll do our quick roundup of mortgage news first and then get to the four biggest mistakes to make with your mortgage.

Four Reasons to Refinance Before Summer

Yahoo Homes gives us this list:

  1. Your home value is likely to decrease during the summer.
  2. The government may stop influencing mortgage rates and backing programs.
  3. You could be affected by new escrow account rules.
  4. Lowering your interest rate by less than 1% can have big long term impact.

U.S. Homebuilder Confidence on Rise

The National Association of Home Builders/Wells Fargo builder sentiment index released Wednesday rose to 44 in May from 41 in April. The increase for May was the first month-to-month gain since December. Concerns over rising costs for land, building materials and labor have been holding the confidence levels down.

So more people are wanting new homes. Materials are becoming more available. There’s still some issues with smaller builders having difficulties getting loans, but large builders are finding it easier. The biggest issue is still finding qualified labor in areas that are building up primarily in Arizona, California, Texas, Colorado and Florida.

Late Payments On Decline

So, we have more homes being built, more homeowners, more refinancing, and fewer late payments. The percentage of mortgage holders at least two months behind on their payments fell by 21% in the first quarter of this year compared to last year stated credit reporting agency TransUnion earlier this month.

California had a statewide rate of 4.2%. Florida still has the highest mortgage delinquency rate in the nation for the first quarter at 11%, but that’s down nearly 21% from the same period last year, the firm noted.

Four Mortgage Mistakes to Avoid At All Costs

You may be seeing specials like 1.99% mortgage rates and want to rush to refinance. But take a deep breath first and read these four mistakes to avoid.

  1. Paying Your Mortgage Before Paying Off Higher-Interest Debt. Credit card debt and auto loans are not tax deductible like student loans and home mortgages. Also, their interest rates are usually higher overall. So pay off the higher interest debt first, and then focus on the rest. You’ll save yourself a lot of money in the long run.
  2. Getting a Loan for “Free”. Often you’re trading no-cost loans for a higher interest rate. While that may be best for you right now, research all of the effects so you can make a smart choice.
  3. Getting a 15-Year Mortgage, But Having No Financial Security. Can you really afford the payments? If you have some concerns, look into the 30 year and pay extra.
  4. Not Thoroughly Researching Lenders. Some questions you may want to ask your loan officer include whether or not your interest rate will be fixed or variable, and if the lender offers an introductory rate, when it will expire, and what the new rate will be. A professional loan officer will want to help educate you on the rates and fees.

If you’re thinking about refinancing, make an appointment with a professional loan officer to discuss your financial situation. They study the rates and fees as well as news that impact rates. And a professional loan officer will be happy to help you find options for your mortgage.

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