1. Not putting a condition of financing on the offer to purchase. Even with a pre-approval the lender can still say no if they don’t like the property.
2. Not getting a home inspection. Home inspectors can let you know if you will be looking at an expensive repair in the near future.
3. Using the seller’s realtor. The realtor that represents the seller must by law act in the sellers’ best interest, not yours.
4. Not getting pre-approved for a mortgage. You can spend a lot of time looking at properties you won’t be able to buy, in the meantime, you may miss the property that is right for you.
5. Not checking the status certificate of a condo. You could find yourself facing special assessments in the thousands and/or much higher maintenance fees than you expected.
6. Making mistakes with the RSP first time buyer program can render you ineligible and cost you thousands in taxes. You should always consult with your Certified Financial Planner or an accountant first.
7. Taking the lowest interest rate mortgage. The lowest rate isn’t always the best mortgage for you. %%%% of five-year mortgages end up being refinanced or broken before maturity, the amount of the penalty can vary widely. some mortgages can only be broken if the property is sold
8. Taking the mortgage life insurance from the lender is rarely the best deal and over the length of a mortgage, you could spend thousands in extra premiums for inferior protection.
9. Not taking title insurance. This confuses many buyers as there are different types of title insurance available to you. The mortgage lender will require you to purchase the title insurance that protects the lender, you should also buy title insurance that protects you.
10. Making a large purchase before closing. people will often go shopping for furniture or a new car or other major purchase once their mortgage has been approved. The lender will usually pull your credit one final time before it advances the funds for the purchase. If the lender sees that you all of a sudden have a bunch more debt you may no longer qualify for the mortgage. This of course often occurs 24 or 48 hours before closing and it may not be possible to secure new financing in this time period. You could be sued by the seller if you aren’t able to complete the purchase.
Bonus Mistakes:
a)Not budgeting enough for closing costs. Title insurance, legal fees, moving costs, distributions (prepaid property taxes, utilities, maintenance fees), and the home appraisal can all be part of closing costs.
b) Just signing your renewal when your mortgage comes up for renewal. Lenders know that because people are busy they will often just sign the renewal without taking the time to see what else is available. This can be very profitable for the lender and can cost you thousands in extra interest.
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