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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🏘️ Housing Shortages in 2026: What Investors Must Know About Financing 🔍
🏘️ Housing Shortages in 2026: What Investors Must Know About Financing 🔍
📉 The Housing Supply Crisis & Investor Loan Strategies You Need in 2026 💰
🏘️ Housing Shortages & Investor Financing – What’s Ahead
The U.S. housing market is entering 2026 with one unavoidable truth: we don’t have enough homes, and we won’t catch up anytime soon. With supply lagging far behind demand, investors are stepping into the gap—fueling rental growth, accelerating build-to-rent (BTR) activity, and reshaping mortgage financing trends.
As a mortgage brokerage with access to 600+ lenders, Medallion Funds is seeing firsthand how housing shortages are influencing investor loan structures, underwriting trends, and risk models. Here’s what today’s investors need to know.
1. The Housing Shortage Is Worsening—Not Improving
Despite new construction activity, the U.S. remains 3.2–4.5 million units undersupplied depending on the methodology used. Several factors are driving the gap:
• Delays in new construction pipelines
• High labor and materials costs
• Zoning restrictions limiting density
• Rising household formation and migration to Sunbelt states
Markets like Texas, Florida, Tennessee, and the Carolinas continue to absorb population growth fastest—keeping vacancy rates tight even with new supply coming online.
For investors, this environment creates long-term rental stability and strong absorption for well-located assets.
2. Why Housing Shortages Are Driving Investor Demand
When inventory is low, investors benefit in multiple ways:
• Higher rental demand – Renters stay longer because fewer homes are available.
• Stronger year-over-year rent growth in undersupplied submarkets.
• Faster lease-up for renovated or newly purchased properties.
• Increased appetite for build-to-rent and small multifamily investments.
Investors who understand these trends can secure properties before pricing resets upward again.
3. Financing Conditions Are Improving—But Not for Everyone
Mortgage rates are expected to gradually decline through 2026, but investor loans will still rely heavily on the lender’s risk appetite. The most commonly used loan types include:
• DSCR Loans
Ideal for rental investors, and now more flexible with:
– Lower DSCR thresholds (sometimes 0.85–1.0)
– Bank statement options
– Interest-only periods
– 30- and 40-year fixed terms
• Portfolio Rental Loans
Great for investors needing:
– Blanket financing (5–20 properties)
– Cross-collateralization
– Lower liquidity requirements
– Streamlined underwriting
• Bridge Loans
Critical during value-add rehab cycles when:
– Rent growth is projected
– Units need renovation
– Sellers won’t give large concessions
• Construction & Build-To-Rent Loans
High demand in undersupplied metros with population growth.
Medallion Funds is increasingly placing BTR developer financing as more investors build their own rental communities to bypass inventory shortages.
4. Underwriting Is Changing Because the Market Is Changing
Lenders are updating their risk models to reflect today’s shortages:
• Greater emphasis on rental comps in constrained submarkets
• More tolerance for lower DSCR when vacancy risk is minimal
• Stronger pricing incentives for long-term holds
The biggest opportunity?
Investors who can demonstrate stabilized income potential are getting superior rates and loan terms.
5. What Investors Should Do Now
To position yourself for the next 12–24 months:
1. Get pre-approved early – Competitive markets move fast.
2. Consider DSCR loans before rates reset downward and pricing increases.
3. Look at emerging markets near major job corridors (Katy, Fulshear, Richmond, Conroe, etc.).
4. Run full cash-flow scenarios with long-term hold assumptions.
5. Evaluate BTR or small multifamily as a hedge against low inventory.
The housing shortage is not a short-term story—it is a structural investment opportunity.
If you're planning to acquire, build, or refinance investment property, Medallion Funds can structure the right loan, from DSCR to BTR construction to portfolio financing.
Final Takeaway
Home supply will remain constrained for years. Investors who secure the right financing today will benefit from:
• Rising long-term rental demand
• Lower future refinance rates
• Consistent appreciation in high-growth markets
Smart financing—not timing—will determine who wins the next cycle.
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© 2023-2024 Bill Rapp, Medallion Funds LLC, Director of Capital Advisory
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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. Copyright © 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 ©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/