🏡 5 Mortgage Shopping Mistakes to Avoid

Preparation is crucial for anyone looking to score the best deal on a mortgage. As it is, a home is one of the most expensive purchases you will make so it’s important to avoid making mistakes that cause you to pay more than you should. Take your time and do due diligence before committing to anything as with the right information and guidance, you can make a smart and confident decision. Here are some five pitfalls to avoid when shopping around for your mortgage.
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Failing to Check Your Credit Score Before Starting the Process
It’s important to review your credit as lenders use your credit score in determining whether you are a good candidate for a mortgage loan. Being aware of your credit can help you understand the state of your finances and take the necessary steps. If your credit doesn’t look good, you can start improving your score or disputing any errors before approaching your potential lenders.

Applying for New Credit Simultaneously
Applying for other credits or making excessive charges on existing credit lines while simultaneously applying for a mortgage loan can impact on your current rating. If you apply for a credit card or car loan before or during the mortgage application process, you might lower your credit score enough to kill your eligibility or fail you to qualify for better interest rates and loan terms.
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Choosing a Mortgage Lender Without Shopping Around
Many borrowers apply for a mortgage with a single lender without bothering to check-out several to compare costs. It never hurts to shop around to get better rates and see what other mortgage lenders can offer. If possible, consider the help of a broker to help you look around to find the best terms with the lowest rates.
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Skipping Pre-approval
Not getting a mortgage pre-approval is a common mistake made by many prospective home buyers. The pre-approval process is more thorough than a simple pre-qualification, and it essentially helps you know exactly how much financing you can qualify for. Once you figure what you can afford based on your salary and assets, you can make a decision without having to worry about wasting time or getting disappointed.

Ignoring the Closing Costs and Additional Expenses
The costs of home ownership can be quite shocking, especially if you are moving from renting to owning a house. Besides the down payment, buying a house involves closing costs (2 to 5 percent of your home’s purchase price) that should be factored in the budget. Ensure you get all of the fees in writing and negotiate them down. You should also take into account all the additional costs of owning a home like regular maintenance, utilities, auto insurance, property taxes, etc.
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