This is the common complaint of people who are paying their loans from banks that were not fully educated on the idea of how a bank financing works before availing it.

Borrowing money for your real estate investment may be easy but make sure that you are prepared and fully understand the "mortgage traps" that go with it. Borrowers usually concentrate on the maximum amount that they can borrow without even realizing that there are a few more items that they have to watch out. Some lenders do not fully understand the financial details that come with borrowing so they end up ill-equipped when it comes to advising their clients. In borrowing money for your real estate acquisition, here are some of the traps and tips.

The lender needs money to spend in investigating your credit rating and the value of the property that you are offering as collateral. Lenders have standard fees that are needed to process your loan but you may be paying unnecessary fees in the processing of your mortgage.

Before signing a loan agreement, ask the lender for a detailed list of the expenses that would go with the loan. It is your right to know every detail of the amount that you will be paying. Some of these expenses are documentary stamps, fire insurance, mortgage insurance, processing fees, etc.

If you plan to buy a property on a low downpayment scheme, be extra careful. A very low downpayment means that you will have to borrow a lot of money. The interest payment for the borrowed amount can be so large that the total price of the property will be high.

Also, do not be immediately attracted with a property that is open in the market at a very low price since there may be a catch to it - a fake title, a title with a lien or encumbrance, or the person that you are talking to might not be the real owner or the authorized representative.

Estimate how much is the total amount that you will be paying for the property if you give a very low downpayment. Check out the authenticity of the title and have a real assessment of value. If you want to buy a property but you are not sure of its real value, you can ask the services of an appraiser. It is best that you seek the advice of a legal counsel or a real estate broker.

After going through the process of loan application by giving all of the documents, being told that you are not qualified causes a lot of emotional and physical stress on your part. What happens if you have given a reservation that cannot be refunded after finally being told that you are not qualified or not.

Especially if you are a valued client of a lender, you may ask for a pre-approval in order for you to know how much you can afford. If you are giving a downpayment and you will rely on financing to fully pay the property, make sure that you can recover a major part, if not all of your downpayment in the event that you do not qualify for a loan. If you have a bad credit rating in the past, tell your lender so they can immediately assess if you are qualified or not.

A lender's objective is to get you into the loan for an extended period of time that will give them more interest payments (which is the reason why they exist). What happens now if you would want to shorten the payment period since you can now afford a higher monthly payment?

Make sure that the loan agreement allows you to accelerate payments. Through this, you will be able to pay up your loan faster. Do your best to shorten the payment period since the earlier you can pay, the more equity you will have in your own home. Check with your lender if they would require an extra fee if you pre-pay the loan.

You might negotiate with an owner to assume the existing mortgage on the property that you are buying only to find out that after continuing all of the payments, you cannot transfer the ownership to yourself.

Many lenders prohibit the assumption of mortgage especially when it comes to real estate. If ever they do allow, you would have to inform which might require that your credit standing be checked. It is always safe to inform the lender if you are assuming a mortgage or when buying property in cash.