Avoiding Pitfalls During The Home Loan Process
The following excerpt from the Consumer Financial Protection Bureau’s Home Loan Toolkit notes some of the common pitfalls homeowners should avoid during the mortgage process. The complete toolkit, including financial worksheets and valuable tips, is available as a download (in PDF).
Don’t sign documents when important details are left blank or documents you don’t understand.
You are agreeing to repay a substantial amount of money over an extended period of time. Make sure you know what you are getting into and protect yourself from fraud.
Don’t assume you are on your own either. HUD-approved housing counselors can help you navigate the process and find programs available to help first-time homebuyers. You can find a HUD-approved housing counselor in your area at consumerfinance.gov/find-a-housing-counselor or call HUD’s interactive voice system at (800) 569-4287.
Don’t take on more mortgage than you want or can afford.
Make certain that you want the loan that you are requesting and that you are in a position to live up to your end of the bargain. Don’t count on refinancing, and don’t take out a loan if you already know you will have to change it later.
If you are not comfortable with the loan offered to you, ask your lender if there is another option that works for you. Keep looking until you find the right loan for your situation.
Don’t fudge numbers or documents.
You are responsible for an accurate and truthful application. Be upfront about your situation. Mortgage fraud is a serious offense.
Don’t hide important financial information.
Hiding negative information may delay or derail your loan application.
The Consumer Financial Protection Bureau is a federal agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives. Have a question about a common consumer financial product or problem? You can find answers by visiting consumerfinance.gov/askcfpb.