The Top 5 Mortgage Mistakes to Avoid
Buying a home can be an exciting and rewarding experience, but it can also be a daunting and overwhelming process, especially for first-time homebuyers.
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Mortgages are a significant financial commitment, and making mistakes during the process can have serious consequences. In this blog post, we'll explore the top 5 mortgage mistakes to avoid.
1. Failing to Check and Improve Your
Credit Score
Your credit score plays a significant role in determining your eligibility for a mortgage and the interest rate you'll receive. Many first-time homebuyers make the mistake of failing to check their credit score or not taking steps to improve it before applying for a mortgage.
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To avoid this mistake, check your credit score and take steps to improve it if necessary. This may include paying off outstanding debts, making on-time payments, and disputing any errors on your credit report. A higher credit score can lead to a lower interest rate and a more favorable mortgage offer.
2. Ignoring
Closing Costs
Another common mistake is ignoring closing costs. Many first-time homebuyers are unaware of the various fees associated with closing a mortgage, such as attorney fees, title search fees, and appraisal fees. These costs can add up quickly and significantly impact the total cost of the mortgage.
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To avoid this mistake, research the average closing costs in your area and budget accordingly. Be sure to factor in these costs when considering the overall cost of the home.
2. Ignoring Closing Costs
Another common mistake is ignoring closing costs. Many first-time homebuyers are unaware of the various fees associated with closing a mortgage, such as attorney fees, title search fees, and appraisal fees. These costs can add up quickly and significantly impact the total cost of the mortgage.
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To avoid this mistake, research the average closing costs in your area and budget accordingly. Be sure to factor in these costs when considering the overall cost of the home.
3. Not Getting Pre-Approved
Getting pre-approved for a mortgage is an essential step in the home buying process. Pre-approval gives you a clear idea of how much you can afford to spend on a home and helps you avoid the disappointment of falling in love with a home you can't afford.
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To avoid this mistake, get pre-approved for a mortgage before you start shopping for a home. This will help you narrow down your search to homes that are within your budget and prevent you from wasting time on homes that are out of reach.
4. Taking on Too Much Debt
Taking on too much debt before or during the mortgage process can have serious consequences. Lenders look at your debt-to-income ratio when determining your eligibility for a mortgage. If you have too much debt, you may not qualify for a mortgage or may be offered a higher interest rate.
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To avoid this mistake, avoid taking on new debt before or during the mortgage process. This includes opening new credit cards, taking out a car loan, or making large purchases on existing credit cards.
4. Taking on Too
Much Debt
Taking on too much debt before or during the mortgage process can have serious consequences. Lenders look at your debt-to-income ratio when determining your eligibility for a mortgage. If you have too much debt, you may not qualify for a mortgage or may be offered a higher interest rate.
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To avoid this mistake, avoid taking on new debt before or during the mortgage process. This includes opening new credit cards, taking out a car loan, or making large purchases on existing credit cards.
5. Choosing the Wrong Mortgage
Choosing the wrong mortgage can be a costly mistake. There are various types of mortgages available, and each has its pros and cons. Choosing the wrong mortgage can lead to higher interest rates, higher monthly payments, and a more significant financial burden in the long run.
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To avoid this mistake, research the different types of mortgages available and choose the one that best fits your financial situation and goals. Don't be afraid to ask your lender questions and seek advice from a financial advisor.
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💡 3 Credit Score Myths That Could Cost You Your Dream Home
⚠️ 3 Lies Homebuyers Still Believe About Credit Scores
When it comes to buying a home, few topics cause as much confusion as credit scores. Between outdated advice and online myths, many homebuyers still make avoidable mistakes that can delay — or even derail — their mortgage approval. Let’s debunk the top three credit score lies that keep borrowers from success.
Lie #1: You Need Perfect Credit to Get a Mortgage
This one stops too many potential buyers before they even apply. The truth? You don’t need an 800 score to qualify.
·FHA loans can approve borrowers with scores as low as 580.
·Conventional lenders often accept scores in the mid-600s with compensating factors.
The focus isn’t perfection — it’s consistency and responsibility. Late payments hurt more than low balances, and one or two blemishes won’t ruin your chances if the rest of your financial profile is strong.
Lie #2: Checking Your Own Credit Hurts Your Score
Another myth that refuses to die. When you check your credit, it’s considered a soft inquiry, which has zero impact on your score.
Hard inquiries — like when you apply for new credit cards or multiple loans — are the ones that can temporarily lower your score by a few points.
Pro tip: Use free tools like Annual Credit Report: https://www.annualcreditreport.com/index.action
Experian, Trans Union, and Equifax all have online access now where you can track your progress and dispute errors before applying for a mortgage.
Here are the three major U.S. credit‐reporting agencies where clients can file disputes and check status:
1.Equifax — https://www.equifax.com/personal/credit‐report-services/credit‐dispute/ Equifax+1
2.Experian — https://www.experian.com/disputes/main.html Experian
3.TransUnion — https://www.transunion.com/credit-disputes/dispute-your-credit transunion.com+1
Lie #3: Paying Off Debt Instantly Fixes Your Score
Paying off debt helps — but it’s not a magic button. Credit scores update when creditors report new balances, which can take 30–60 days.
Lenders also look at your credit utilization ratio, so closing paid-off accounts too soon can actually hurt your score by lowering your available credit.
A smarter move? Keep your oldest accounts open and maintain low balances. That builds both trust and credit depth, two major factors underwriters love.
✅ Final Takeaway
Credit myths cause fear — and fear keeps people from homeownership.
Your credit report tells a story of responsibility, not perfection. With the right loan program and a little preparation, your dream of homeownership can happen sooner than you think.
👉 Ready to see where you stand? Let Medallion Funds review your credit profile and guide you toward the best loan options available.
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© 2023-2024 Bill Rapp, Medallion Funds LLC, Director of Capital Advisory
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This is not an offer to enter into an agreement. Not all customers will qualify. Information, rates and programs are subject to change without notice. All products are subject to credit and property approval. Other restrictions and limitations may apply. Copyright © 2021 | Medallion Funds
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Corporate NMLS NMLS # 1825831 | Company Website: https://medallionfunds.com/bill-rapp/
Copyright ©2021 | Mortgage Viking Team Licensed to Do Business | NMLS # 228246
This is not an offer to enter into an agreement. Not all customers will qualify. Information, rates and programs are subject to change without notice. All products are subject to credit and property approval. Other restrictions and limitations may apply
Corporate | NMLS ID NMLS # 1825831
Corporate Address : 2651 N. Green Valley Pkwy STE. 101 Henderson, NV 89014 https://medallionfunds.com/bill-rapp/