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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š¦ Banks Tiptoe Back Into CRE Lending ā But Old Loan Troubles Still Haunt the Market ā ļø
š¦ Banks Tiptoe Back Into CRE Lending ā But Old Loan Troubles Still Haunt the Market ā ļø
š CRE Lending Rebounds in 2025 ā Yet Troubled Debt and Maturity Risks Are Far From Over š„
š¦ Banks Tiptoe Back Into CRE Lending ā Even As Old Troubles Stick Around
After two years of tightening credit, frozen loan committees, and conservative underwriting, banks are finally stepping back into the commercial real estate (CRE) arena. But hereās the truth investors and borrowers need to hear:
Yesābanks are lending again.
Noāthe problems from the low-rate era arenāt gone.
And the next five years will be defined by slow-moving risk, not sudden collapse.
As a mortgage broker working directly with both investors and lenders, Iām seeing the same pattern: a lending thawā¦ but far from a clean slate.
š„ Banks Are Lending Again ā The Thaw Is Real
According to Newmark, banks originated $227 billion in CRE loans during the first nine months of 2025āan 85% year-over-year surge that finally returns origination levels to 2019 norms.
A few big shifts worth noting:
Multifamily made up 50% of Q2 originations
Office is seeing selective new financingāa sign that valuations finally hit clearing levels
Regional banks are re-opening pipelines, though with tighter DSCR and lower leverage
Bridge lenders and debt funds are being out-competed on rates again
This isnāt a boom. Itās simply a return to functioning credit marketsāsomething the sector hasnāt seen since early 2022.
ā ļø But Legacy Problems Havenāt Gone Away
Even though banks are lending, theyāre still dragging the weight of last cycleās debt.
CRE delinquencies sit at 1.56%, the highest since 2014
At the nationās largest banks, delinquencies hit 1.86%
Nonperforming loans continue to rise despite the lending rebound
Troubles are concentrated in:
office
older multifamily
hospitality in oversupplied markets
transitional assets with stalled business plans
Analysts warn that banksā stability reflects caution, not improved fundamentals.
š§± The āExtend and Pretendā Era Isnāt Over
Banks are still relying on loan modifications and short-term extensions to avoid realizing losses.
$957 billion in CRE debt matures in 2025
Nearly half is held by banks
$663 billion is coming due in 2026
Banks hold 46% of that exposure, more than any other lender class
Instead of one giant āmaturity wall,ā the market now faces a rolling debt wave extending through 2030
This rewrites the entire risk timeline.
Instead of a crash ā cleanup ā recovery cycleā¦ weāre on a slow-drip, multi-year workout cycle.
š§ļø Macro Risks Are Rising
While lenders are more active, macroeconomic clouds continue to darken:
Rising stagflation pressures
Declining consumer sentiment
Slower job growth
Rate volatility
Recession odds estimated anywhere from 35% to 93%, depending on the model
Any major shockāeconomic or geopoliticalācould trigger:
forced sales
rapid repricing
distress escalations
higher delinquencies
This is why lenders remain conservative even as pipelines reopen.
š„ The Reality: A Slow Burn, Not a Sudden Collapse
Banks are choosing controlled workouts over liquidation.
Thatās good news for borrowers.
No fire sales
No mass foreclosures
No 2008-style panic
But it also means:
distress will unwind slowly, not suddenly
pricing discovery will take longer
sponsors with weak balance sheets will struggle
borrowers with expertise (or strong brokers) can negotiate better terms
š THE TAKEAWAY
Banks are lending againābut they havenāt resolved the core issues created by low rates, rapid cap rate expansion, and unrealistic valuations from 2019ā2022.
Until something forces their hand, expect:
gradual workouts
conservative underwriting
rolling maturity stress
opportunities emerging deal-by-deal, not market-wide
Smart borrowers should act nowābefore competition heats up and while lenders are still offering attractive structures to strong sponsors.
If you need guidance on refinancing, restructuring, or sourcing new capital, the Medallion Funds team is here to help.
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Ā© 2023-2024 Bill Rapp, Medallion Funds LLC, Director of Capital Advisory
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Copyright Ā©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. Copyright Ā© 2021 | Medallion Funds
Corporate | NMLS ID NMLS # 1825831
Corporate Address : 2651 N. Green Valley Pkwy STE. 101 Henderson, NV 89014
Corporate NMLS NMLS # 1825831 | Company Website: https://medallionfunds.com/bill-rapp/
Copyright Ā©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/