The task seems simple.

Either purchase a new home or refinance your current home.

As you might already know — most of us home owners learn the hard way, usually by paying much more than we deserve to pay in closing fees and junk fees.

Here’s a top ten list of things NOT to do: 

1. Do Not begin your mortgage shopping process online by filling out a mortgage quote form until you know your credit score and your home’s appraisal value. If you do you’ll be bombarded with lies while lenders and brokers guess at your home’s value. Find an appraiser in the “Resources” section in the menu to the right.
2. If you have a low credit score, get it fixed first. Same goes with negative items being reported on your credit. Get them removed by visiting our “Resources” section in the menu to the right.
3. Know what questions to ask your loan officer. Do Not start off your coversation asking for the lowest interest rate, they’ll give it to you and charge you even more because you don’t know what you are talking about. Lower rates come with higher fees and closing costs. A better question might be; what is the lowest no point rate on a 30 year fixed mortgage?
4. Be prepared to provide real information if you want a real mortgage quote. Don’t be afraid of providing your social security number since that is required to check your mortgage credit profile. Also, know your yearly income figures with accurate numbers and be able to provide accurate numbers for your savings and retirement accounts. Showing assets OR savings on a mortgage application can increase your chances of the best financing options.
5. Ask for a Good Faith Estimate or GFE, which will detail the closing costs. Focus on line 801 (points you will pay) and line 824 (points paid by the lender). Most loan officers won’t show line 824 so when you require it you’ll automatically show you know what you’re talking about. Accept nothing less than the truth.
6. Don’t be suckered into paying up front fees, such as a committment fee or a rate lock fee, etc. It typically does not cost to lock an interest rate and your loan officer should be willing to do the up front work at no cost to earn your business. If not, move on to one that will.
7. Know whether it makes sense to pay points or pre paid interest up front. Paying points can provide savings over the long term since you’ll be getting a lower interest rate. Paying points and then refinancing or selling in less than 5 years will typically be a waste of money. Paying points or pre paid interest is usually only valuable if staying in the home long term, 10 or more years.
8. Don’t be mislead by low teaser rates that almost no one qualifies for. Be less rate focused and more process and knowledge focused by studying the topics here at Stupid Home Owner first.
9. Know up front that a loan officer quote and the actual lender approval almost always differ. Signing the preliminary documents and providing copies of pay stubs and supporting documents is the best process for getting approved. You are not approved until you get your loan into underwriting. You are not committing to a loan just yet but you are showing your committment to obtain financing and gain a real approval, not just a quote.
10. Once you obtain an approval, you can use it as a tool to have other loan officers compete based on a real offer and not just a quote which is a guess at best.

Yes, there’s more than just 10 things to pay attention to. Be sure to navigate the Stupid Home Owner website and learn all there is to know about your home financing options. Informed is better than stupid any day.