Posted by Apex Home Loans ● September 8, 2021

4 Mistakes to Avoid When Applying for a Home Loan

Couple taking selfie with keys to home

 

The home loan process can seem like a scary task, especially if you are a first-time homebuyer. Apex Home Loans is here to guide you in the right direction and ensure a smooth homebuying process. 

Below we have listed some common mistakes that homebuyers make during the loan process, so you can better prepare on what not to do.

 

1. Failing to Check Credit Scores in Advance

Your credit score is very important to check before you apply for a loan. It represents your overall credit history, and lenders consider it as a key indicator of how likely you are to pay your mortgage and can affect your interest rate. Having good credit can save you thousands of dollars in interest over the life of your loan.

You can pull a free copy of your credit report once a year from AnnualCreditReport.com or Experian. This will show you how you can improve your credit and give you the opportunity to report anything that isn’t correct.

2. Starting the Home Loan Process Too Late
Let’s say you stumble across your “dream home”. This piqued your interest, and the price point seems reasonable. You decide to find a mortgage lender, only to find out your spouse’s low credit score, or your high debt-to-income ratio is limiting the amount to which you qualify for. This is a heartbreaking situation that can be easily avoided by getting pre-approved before you start looking at houses.

3. Opening or Closing Lines of Credit
You might think it’s a good idea to open another credit card to cover expenses. But your credit score will take a hit if you do this, even if you don’t end up using the credit card. If you do end up using the credit card, you would increase your debt, which isn’t a good thing to do either. Talk to your lender before making any financial moves while in the homebuying process.
 
4. Buying More House Than Necessary
Just because you’re approved for a certain loan amount, doesn’t mean you have to buy a home that costs that much. Make sure you review your personal expenses and determine how much you are comfortable paying on your monthly mortgage. Live within what you feel comfortable with, and you’ll be more prepared to avoid financial losses. Buying a home is likely the biggest purchase you’ll make in your life, so it’s important to be confident in your decision.

 

Bottom Line For Homebuyers

There are some mistakes you want to avoid when looking to get approved for a home loan. Start your homebuying journey on the right foot by reviewing your credit report and finances before you get pre-approved. Even after you get pre-approved, you should talk to your lender before making any financial decisions during the process. Additionally, even though you got approved for a certain amount, don’t feel the need to purchase a house for the same amount. Connect with our experienced team if you have any questions about the loan process. We are happy to answer any questions you may have or get you started on the loan process.

 

Contact Us Apply Now Get Pre-Approved

 

Topics: Real Estate, Mortgages, Credit, Common Mortgage Mistakes, First Time Homebuyer, Home Buyers, VA Loans, Mortgages for Millennials, Preparing to Buy A Home

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