Many people make expensive, easily avoidable mistakes when shopping for a mortgage.
"Borrowers who don't do their homework often end up paying more than they should, and in some cases that extra cost can really hurt," says Paul Sian, a real estate lawyer and Realtor with HER Realtors in Cincinnati. A study from the Consumer Financial Protection Bureau, or CFPB, concludes that many consumers don't shop for mortgages, and they tend to get their mortgage information from lenders and real estate agents, who aren't impartial.
According to Sian, borrowers tend to fixate on the home's purchase price, followed by the interest rate. But factors like closing costs, the loan's total price, whether the loan is fixed or variable, and whether the borrower is required to get private mortgage insurance can dramatically alter what borrowers end up paying.
Following are 4 common mortgage errors and tips for avoiding them.