There are a number of common mistakes potential home buyers make when applying for a mortgage—and those mistakes can end up costing you time, money, and frustration during the home buying process.
But what, exactly, are those mistakes?
A video from realtor.com outlined some of the major mistakes potential home buyers make when applying for a home loan, including:
- Making a big purchase. The loan process is not the time to make a major purchase, like a new car or furniture—unless you can pay for it in cash. If you take out a new loan or make a major purchase on credit, it can impact your debt-to-income ratio—and could put your home loan at risk.
- Not using a local (and experienced!) lender. You wouldn’t work with an out-of-area real estate agent to buy your home. So why work with an out-of-area lender? Home deals can fall apart if the lender doesn’t understand the market—which makes working with an experienced local lender the safest bet for your home purchase.
- Not shopping around. If you only talk to one lender, there’s no way to know if you’re getting the most competitive interest rates or loan package. When buying your home, make sure to shop around to get the best deal.
So, what does this mean for you? If you’re planning on applying for a mortgage, it’s important to know the common mistakes people make during the process; that way, you can avoid those mistakes—and make sure your mortgage application process goes as smoothly as possible.