7 Top Mistakes to Avoid When Getting a Mortgage

Getting a mortgage is one of the biggest financial decisions you’ll make. To improve your chances of getting your mortgage application approved, there are some common mistakes that you should be aware of.

7 Common Mortgage Mistakes

As a homebuyer, it is important to understand how both mortgages and the application process work. This knowledge will equip you to reach your home-buying dreams. It is also vital to understand how to avoid the most common mortgage mistakes, including:

Not getting pre-approved for a mortgage. Taking the time to get pre-approved for a mortgage is a valuable step to homeownership. It demonstrates to sellers and real estate agents that you are serious and you have the means to buy a home. It can also give you a good idea of how much you can spend on a home.
Believing that all mortgages are the same. Unfortunately, this mistake can end up costing you a lot of money. The reality is that not all mortgage products are the same. One of the main differences is the interest rate that lenders charge. It is a good idea to shop around until you find a rate you are happy with. You can contact a professional mortgage company for more advice.
Small or no down payment. For those looking to buy a home and eager to get into the market, smaller down payments or no down payments sound like great options. However, they can cost you more in the long run.
Failure to consider the full costs of owning a home. Many homebuyers forget that owning a home is an expensive responsibility. There will be costs to the purchase that go beyond the down payment. Closing costs and fees are some of the extra expenses that can take homebuyers by surprise. Moreover, any repairs to your new home will have to come out of your pocket.
Neglecting to check credit scores. Your credit score will be a big part of the mortgage approval process. So, before you apply, you should understand what your credit report says about you. Are there any unpaid loans? Have you defaulted on a loan in the past? Do you have a history of late payments? These decisions could impact your ability to be approved for a loan.
Switching jobs. Lenders will look into your work history during the application process. They will also make their decision based on the employment information you provided on your application. Switching jobs or becoming self-employed while you are trying to get a mortgage can hinder your approval chances.
Taking on more debt. Applying for credit cards, personal lines of credits, or vehicle loans can have a negative impact on your mortgage application. Every debt that you take on increases your debt-to-income ratio, which is a key calculation that lenders use in the mortgage process.