Mortgage Lender
Zillow says that most first-time homebuyers are unaware of this fact: More than 70% make at least one critical mortgage error. That’s a significant number. Don’t panic. You can avoid those mistakes, especially with guidance from trusted Frisco Mortgage Lenders who understand the local market.
This article will discuss the five most significant blunders first-time homeowners make. And we’re going to tell you how to avoid them. Whether you’re looking for a house or just getting started, this guide is for you. So, let’s get started!
What Frisco Mortgage Lenders Say About Ignoring the Pre-Approval Process
Most young buyers fall in love with a house without knowing how much they can afford. That’s a gamble. Mortgage lenders always advise going pre-approved first. It’s more than just a form. It demonstrates to sellers that you’re serious.
Without being pre-approved, you may pursue homes that are out of your price range. Worse, you may lose a deal to someone already pre-approved. That stings.
Also, pre-approval informs you of your price range in advance. You won’t experience the disappointment of viewing homes beyond your means. And here’s the best part: It takes only a few minutes on the internet with most lenders.
So, consult with a lender before contacting that agent or scheduling viewings.
It can save you time, agita, and even cash
for the mortgage payment. But homeownership costs a heck of a lot more than that. Lenders cite this as one of the most significant errors.
Here’s what you should think about:
- Property Taxes: State-dependent, but a mandatory pay each year.
- Homeowners Insurance: Covers your home and personal items. It is compulsory with most lenders.
- HOA Fees: If you reside in a condo or a planned community, anticipate monthly payments.
- Maintenance Fees: Leaks in the roof, busted heaters, and plumbing. Shit happens.
- Utilities: Electricity, gas, water, trash. Those payments add up fast.
It all adds up quickly. A $1,500 home payment might become $2,200 with add-ons. Budget monthly before you purchase. That way, you won’t be caught off guard.
Overlooking Credit Health Before Getting a Loan
Your credit score is more important than you realize. Frisco mortgage lenders use it to determine your loan eligibility, which in turn affects your interest rate.
Most first-time home buyers don’t monitor their credit until it’s too late, or they apply for new credit cards before buying. Both are poor decisions.
Instead, review your credit score a few months before applying. Look for mistakes or late payments. Pay off debt if possible. Even a 20-point score improvement can reduce your mortgage rate.
Also, avoid making large purchases on credit at the time of closing. That new couch can wait. We swear. Your lender may even reject your loan if your debt fluctuates too much.
Bottom line? Protect your credit like gold during this time.
Not Shopping Around for Lenders
Would you buy the first car you test drive? Probably not. So why do that with lenders?
First-time buyers often stick with one bank or lender. But mortgage rates and fees vary widely. Frisco mortgage lenders recommend comparing options because shopping around can save thousands. Here’s what to compare:
- Interest Rates: Even a 0.5% difference saves you big.
- Loan Terms: 15-year or 30-year? Fixed or adjustable?
- Closing Costs: They vary from lender to lender.
- Customer Reviews: See what others have to say. Service is important.
Obtain at least three loan estimates. And don’t be afraid to ask questions! A reputable lender will take the time to explain. If they rush you, look elsewhere.
Check with your local credit union. Often, they have lower fees or better rates than big banks.
Smart shopping helps you buy smart.
Allowing Emotions to Control the Purchase
Buying your first home can be quite an emotional experience. It is, indeed, thrilling. Moreover, your heart is swift to take charge. That is, indeed, a recipe for poor decisions.
Frisco mortgage lenders witness this daily: Buyers overbid on properties they adore or forgo the inspection because they “have to have it.” Don’t.
Always ask yourself: Is this home appropriate for my budget and requirements? If not, move on. There are other houses.
Also, don’t overspend your budget on fancy upgrades. That adorable kitchen isn’t worth drowning in debt. Stick to your strategy. Take a deep breath before making an offer. Consult with your agent. Consider the long-term.
In short, lead with your head, not your heart.
Where Do You Go From Here?
Having understood the pitfalls, you might wonder what steps to take next. Each person’s journey is distinct. Some start by reviewing their credit and consulting with a lender. They may also focus on developing a savings strategy.
No matter where you find yourself on this journey, one thing is sure: planning is invaluable. When you invest time in getting ready, you will ultimately be prepared to make better decisions. That is indeed a victory.
So, what’s the first thing you’re going to do? It may be comparing lenders. At Jack Cooper Mortgage, it could be budgeting. Whatever, you’re one step closer to owning your first home.
Your dream home is nearer than you might have thought—and it begins with that very first smart move.
