Four Fatal Flaws of the Loan application process

Taking the mortgage loan application process at face value – signing your name for the sole intention of approval is deeply flawed. As many first time home buyers repeatedly blunder the process of securing fair & equitable home financing, the following loan application tips and tricks will help you fine tune your borrowing efforts to avoid the fatal flaws:

1. Neglecting to exceed your mortgage financing needs is one of the most common mistakes borrowers make. Capital, cash flow, tax benefits, loss of management, capital appreciation, an equity pay-down and ownership are primary issues that should be addressed prior to the final loan decision is decided. Additionally, it’s an excellent way to test the aptitude of a mortgage professional if they address the up stated issues.

2. Failure to verify seller and home information. Before you obtain the final loan application for your new dream home, did you check the taxes of the house, the payment history, the average listing price of comparable homes, the appreciation value, any future renovation needs... and everything else. Do your homework to ensure you are getting the competitive rate and overall home financing plan.

3. Skirting a negative cash balance flow should be another consideration. Just because you qualify for a new home, does not mean that the property is going to deplete your income and working capital. Not to mention, forecasting appreciation is a challenging feat as the strain of cash flow can expose you to financial vulnerabilities.

4. A lack of adequate insurance can impose a great liability risk upon your residential property. From sidewalk easement, to an non-shoveled stairway, the liabilities of owning property are abounding. Sufficient insurance coverage is a must have. Check with your mortgage broker to cost compare private mortgage insurance (PMI) to other home insurance products.