Many homeowners have trouble refinancing their mortgages, and even those with high-end homes may face foreclosures. It is important to understand the reasons for this as it helps avoid them as far as possible. Many end up making common mistakes when getting a mortgage that can be easily avoided, so here are 4 reasons why borrowers have trouble paying their mortgages. These reasons can help you understand what you need to avoid doing when getting a mortgage:

• Adjustable rates mortgages
  Adjustable rates for mortgages are a dream come true for homebuyers. The mortgage may start with a low interest rate for the first 2 to 5 years, which allows you to buy a bigger house than you can afford otherwise. The market rate is higher than the interest rate in this case, and the borrowers can refinance at a lower rate or the buyer may sell before the rate changes. This type of a mortgage loan is suitable only if you relocate often. However, it may not work when the real estate prices fall as the buyers cannot refinance their loans, which leaves them with two or three times higher mortgage payments. Opting for a mortgage loan with adjustable rates is a common mistake made when getting a mortgage, and the best way to avoid this is to get proper information about the application and address credit problems.
• No down payment
  Many companies offer mortgages without a down payment, but this is harmful in the long run. The purpose of a down payment is to increase the equity amount of your home, reducing the money you owe your creditor.
  Those who make large down payments are more likely to also pay the mortgage as they do not want to lose the investment. On the other hand, many who do not pay a down payment usually find themselves walking away. The more you borrow, the more likely you walk away, leading to foreclosure of the mortgage.
• Reverse mortgages
  A reverse mortgage is given to borrowers who are over the age of 62 years as the mortgage loan is an income stream for them. The equity is paid to the borrower in the form of installments or a lump sum. However, a common mistake made when getting a reverse mortgage is not considering its disadvantages like high origination fees, appraisal fees, attorney fees, title insurance, and mortgage insurance that can eat up the equity and the owner may lose the house.
• Longer amortization
  The period of mortgage repayment is 30 to 40 years, and the bulk of the interest is taken in the first 20 years. This does not allow the borrower to change their home, but it allows them to buy a bigger house. However, making the choice to buy a bigger house is another common mistake made when getting a mortgage as it adds to the total amount due.