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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💼 LLC vs. Personal Name: The Smartest Way to Title Your Investment Property in 2026 🏠
💼 LLC vs. Personal Name: The Smartest Way to Title Your Investment Property in 2026 🏠
🏢 Should You Buy Real Estate in an LLC or Your Personal Name? Investors Need to Know This ⚖️
💼 LLC vs. Personal Name: How Investors Should Title Their Properties When Financing
Choosing whether to title your investment property in an LLC or your personal name is one of the most misunderstood parts of real estate investing. And it matters — not just for asset protection, but also for financing, rates, approvals, taxes, and long-term portfolio planning.
As a mortgage broker who works daily with investors across Texas and the U.S., I can tell you this:
There is no one-size-fits-all strategy.
But there is a smart way to structure your deals depending on your goals.
Let’s break down exactly how investors should think about titling their properties when financing in 2026 and beyond.
🏢 Buying in Your Personal Name: Pros, Cons & When It Makes Sense
✅ Advantages
• Lower interest rates
Conventional and DSCR lenders typically offer better pricing for loans closed in personal names.
• Easier approvals
Lenders can underwrite your credit score, tax returns, and income directly — often resulting in smoother approvals.
• Better long-term financing options
30-year fixed rates, lower DSCR minimums, and streamlined refinances are usually available.
❌ Disadvantages
• No liability protection
If something goes wrong at the property, you are legally exposed.
• Harder to assign later
Transferring title into an LLC after closing may trigger lender due-on-sale clauses (though many do not enforce this if payments remain current).
⭐ Best For:
• First-time investors
• Investors needing the best rate
• DSCR loan borrowers
• House hackers and small multi-unit buyers
🗂️ Buying in an LLC: Pros, Cons & When It Makes Sense
✅ Advantages
• Strong liability protection
Your personal assets stay insulated from tenant or property-related claims.
• Cleaner bookkeeping
LLCs make it easier to track expenses and manage multiple properties.
• Professional credibility
Banks, partners, and contractors often view LLC-owned real estate as more sophisticated.
❌ Disadvantages
• Higher interest rates
Commercial and LLC-titled loans can price higher than personal loans.
• Larger down payments
Many lenders require 20–30% down for LLC-held assets.
• More documents
Operating agreements, EIN, and organizational paperwork are typically required.
⭐ Best For:
• Investors with >2–3 rental properties
• BRRRR investors
• Partnerships
• Investors prioritizing asset protection
• Portfolio loans and blanket loans
⚖️ The Financing Truth Most Investors Don’t Know
Lenders prefer you close in your personal name — but you can often transfer the title into the LLC after closing.
This gives you the best of both worlds:
✔️ Lower rates
✔️ Easier financing
✔️ LLC protection (after the transfer)
✔️ Keep the loan in your personal name
Investors call this the “close personal, hold LLC” strategy, and it is one of the most efficient ways to build a portfolio.
🧠 How I Advise Investors at Medallion Funds
Every investor’s situation is different.
When we build a financing plan, we evaluate:
• Are you building a long-term portfolio?
• Do you need the lowest payment possible?
• Are you using DSCR, bank statement, or conventional financing?
• Are you planning to cash-out refinance later?
• Is asset protection or borrowing power more important today?
With the right strategy, you can finance in your personal name and build your liability protections around your LLCs at the same time.
🏁 Final Takeaway
If you want the best rates — close in your personal name.
If you want the best liability protection — hold in an LLC.
And with the right lender, you can do both.
If you want to structure your portfolio the smart way, reach out and I’ll walk you through options across DSCR, conventional, bank statement, and commercial loans.
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© 2023-2024 Bill Rapp, Medallion Funds LLC, Director of Capital Advisory
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Refinancing youe loan and when to do it
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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/