For most of us, we need to rely on a home loan to buy a house of our own. However, many fail to get approved for a mortgage, not because they don’t qualify for a loan. Sometimes, it’s because of poor financial decisions.
If you’re planning on applying for any Mortgage Loans Midland, TX this year, make sure not to make the following costly mistakes.
Failure To Check How Much You Can Afford
Buying a house is a long-term investment. We already know that a home can cost hundreds of thousands of dollars. What many first-time homebuyers do is to find a home they want without checking how much they can actually afford to buy. Take advantage of mortgage affordability calculators. You’ll have an idea of how much you can pay for, and what price tag will go over your budget.
Not Knowing All The Costs That Comes With Being A Homeowner
Aside from the monthly mortgages, utility bills, and daily expenses, being a homeowner comes with other hidden costs. For one, you’re now responsible for your home’s repair and maintenance costs. There’s the property tax to take care of, along with other expenses link home insurance. Take note that the larger your house, the more fees you’ll have to handle. So, consider the true costs of ownership and weigh your options.
Also Read: More Than a Mortgage: The Cost of Owning a Home
Putting Little To No Down Payment At All
Just because you’re eligible for a low down payment loan doesn’t mean you should already take advantage of it. Some lenders offer down payments lower than the usual 20%. Take FHA loans, for example, which has a minimum down payment of 3.5%. While you can qualify even with just 3.5%, paying this amount comes with additional costs like Private Mortgage Insurance.
Devoting Little Time Shopping For The Best Loan
Not all loans and lenders are the same. Take note that home buyers like you have different needs and situations. If you don’t look around and shop for the best Mortgage Loans Midland, TX, then you might end up paying for more than you can afford. Compare the different loan types and shop around for lenders, and you’ll be able to save money on fees and interest.
Not Knowing The Difference Between A Pre-Qualification And Pre-Approval
Many borrowers will think that getting a mortgage pre-qualification is enough. In reality, there’s a big difference between getting pre-approved and pre-qualified. If you’re serious about buying a house, make sure to get a pre-approval. This way, you’ll actually get to learn how much you can afford and sellers will know you’re a serious homebuyer.
Good Read: Pre-Qualified vs. Pre-Approved: What’s the Difference?
Ignoring First-Time Home Buyer Programs
The best thing about being a first-time homebuyer is you get to qualify for First-Time Home Buyer Options. Not asking your lender if you are eligible for one can cost you tens of hundreds of dollars. Make sure not to make such error, or you might miss competitive mortgage rates and down payment assistance.
Applying For Credit Before Closing The Mortgage
Lenders will make sure you’re financially capable of paying off the mortgage during the application process. However, what borrowers fail to realize is that lenders will also check your credit before closing. This serves as a final financial check to see if there are any changes with your financial status.
Making a huge purchase can affect your finances, and opening new credit loans will increase your Debt-To-Income Ratio. If you don’t want to jeopardize your mortgage approval, avoid significant buys and new credit or loan applications.