Getting a mortgage is one of the biggest financial decisions you will make. A single mistake can cost you thousands of dollars over the life of your loan. Ottawa home loan experts help borrowers avoid these costly errors and secure better mortgage terms.
1.Not Getting Pre-Approved Before House Hunting
Many Ottawa homebuyers start looking at houses before they know how much they can borrow. This wastes time and creates disappointment when you find a home you cannot afford.
Home loan experts get you pre-approved first. Pre-approval shows sellers you are a serious buyer and tells you exactly how much you qualify for. In competitive markets, this makes your offer stronger.
2.Only Talking to One Lender
Most first-time buyers only contact one lender. This mistake costs money.
Ottawa home loan experts work with 20 to 50+ lenders. They compare rates, terms, and fees from banks, credit unions, and private lenders. A difference of just 0.25% on your interest rate can save you $22,500 over 25 years on a $500,000 mortgage.
3.Ignoring Your Credit Score
Your credit score directly affects your mortgage rate. Many borrowers do not check their credit until they apply, then discover errors or issues that lower their score.
Ottawa mortgage professionals review your credit early. They identify problems that could hurt your rate and suggest improvements before applying. Even a 20-point increase can reduce your interest rate and monthly payment.
4.Maxing Out Your Budget
Just because a lender approves you for $600,000 does not mean you should borrow that much. Many buyers focus on the maximum loan amount instead of a comfortable monthly payment.
Home loan experts help you determine what you can actually afford. They consider your full financial picture including property taxes, mortgage insurance, utilities, and maintenance. The 28% rule suggests your mortgage payment should not exceed 28% of your gross income.
5.Forgetting About Closing Costs
First-time buyers often save for their down payment but forget about closing costs. These typically run 2% to 5% of your home’s purchase price.
On a $500,000 home, closing costs can be $10,000 to $25,000. Ottawa mortgage experts prepare a detailed breakdown before you make an offer. This prevents surprises at closing and ensures you have enough money saved.
6.Choosing the Wrong Mortgage Type
Fixed-rate mortgages lock in your rate. Variable-rate mortgages change based on market conditions. There are also options like second mortgages and commercial mortgages for different situations.
Home loan experts explain each option and match you with the right mortgage for your goals. They consider how long you plan to own the home, your risk tolerance, and your financial situation.
7.Making Major Purchases Before Closing
Buying a car or furniture on credit before your mortgage closes can derail your approval. Lenders check your credit again right before closing. A new loan changes your debt-to-income ratio and can cause denial.
Ottawa loan experts warn you about this upfront and guide you through what to avoid financially while your application is pending.
8.Skipping the Home Inspection
Some buyers waive the home inspection to make their offer more attractive. This can lead to expensive surprises after you move in.
A home inspection costs $400 to $600 in Ottawa but can identify problems worth thousands. Mortgage advisors often work with trusted inspectors and know a thorough inspection protects your investment.
9. Not Understanding Mortgage Terms
Mortgage documents are complex. Terms like amortization, prepayment penalties, portability, and interest rate differential confuse many borrowers.
Home loan experts translate mortgage jargon into plain language. They explain what each term means and how it affects you. This includes prepayment options, which can save you years of interest if you understand them.
10. Depleting All Your Savings
Using every dollar for your down payment and closing costs leaves you with no emergency fund. Unexpected repairs or job loss can quickly lead to financial trouble.
Experienced advisors recommend keeping three to six months of living expenses in savings even after buying your home. They can structure your mortgage to maintain a proper emergency fund while still getting you approved.
Get Expert Guidance from Bank Street Mortgage
At Bank Street Mortgage, our experienced team has helped hundreds of Ottawa homebuyers avoid these costly mistakes.
With access to over 200 lender partners and 15+ years of experience in the Ottawa market, we know how to protect your interests and secure the best mortgage terms.
Our mortgage professionals take time to understand your unique financial situation.
We review your credit early, calculate realistic budgets, explain all your options in plain language, and handle the entire process from pre-approval to closing.
Ready to avoid these common mistakes? Use our mortgage calculators to get started, then contact Bank Street Mortgage for a free consultation.