Avoiding costly mortgage mistakes

Lenders could intervene, but many choose not to

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Shortly after starting my Web site, I decided to add a feature on some of the common mistakes borrowers make, and how to avoid them. Today, there are about 100 mistakes on the list, and it continues to grow. Recently, I decided to take another look at this list as I pondered a different question: Why do mortgage borrowers make so many mistakes, and are there changes in the system that would reduce them? I found that virtually all of the mistakes that borrowers make fall into two broad categories: transactional decisions and lifestyle decisions. The first category includes such decisions as where to go to obtain market information, how to find a mortgage provider, how to shop alternative providers, how to make price comparisons, and the like.The goal underlying these decisions is to obtain a loan at the best terms available in the current market. The mistakes that borrowers make result in their paying too much for the mortgage. Here is a typical transactional mistake: Jones r...