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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šŸ’° Mortgage Loan Comparison 2026: FHA, VA, Conventional & Jumbo Explained šŸ”

šŸ” Conventional vs FHA vs VA vs Jumbo Loans (2026 Guide): Which Mortgage Wins? šŸ“Š

Bill Rapp, Commercial Mortgage Broker
January 10, 2026ā€¢3 min read

šŸ” Conventional vs FHA vs VA vs Jumbo Loans (2026 Guide): Which Mortgage Wins? šŸ“Š

šŸ’° Mortgage Loan Comparison 2026: FHA, VA, Conventional & Jumbo Explained šŸ”

Loan Comparisons for Different Buyers: Conventional vs FHA vs VA vs Jumbo ā€” Who Wins in 2026?

There Is No ā€œBestā€ Loanā€”Only the Best Loan for You

In 2026, mortgage rates are stabilizing, underwriting is tightening selectively, and buyers are more strategic than ever. The biggest mistake borrowers make is chasing the lowest rate instead of the right loan structure.

This guide compares Conventional, FHA, VA, and Jumbo loans using real buyer profiles, practical tradeoffs, and clear side-by-side comparisonsā€”so you can choose the loan that actually wins for you.

Quick Loan Comparison Chart (2026 Snapshot)

Loan Type

Best For

Key Advantage

Main Tradeoff

Conventional

Strong credit buyers

Lowest long-term cost

Higher credit standards

FHA

First-time / lower credit

Flexible approval

Permanent mortgage insurance

VA

Veterans & active military

$0 down, no MI

VA eligibility required

Jumbo

High-income buyers

Buy higher-priced homes

Tighter underwriting

Conventional Loans: The Long-Term Cost Winner

Best for: Buyers with solid credit, stable income, and documented assets.

Why Conventional Wins in 2026

  • Lower lifetime mortgage insurance than FHA

  • Flexible down payment options

  • Strong refinance positioning when rates drop

Real Example:
A dual-income professional household buying a $425,000 home with good credit often benefits most from a conventional loan due to lower total interest paid over time.

Watch out: Credit score sensitivity and stricter debt-to-income ratios.

FHA Loans: Accessibility Over Perfection

Best for: First-time buyers, self-employed borrowers, or credit-repair scenarios.

Why FHA Still Matters

  • More forgiving credit standards

  • Competitive approval odds when others decline

  • Ideal stepping-stone loan

Real Example:
A buyer rebuilding credit after a job change qualifies with FHA today, then refinances into conventional once equity and credit improve.

Watch out: Mortgage insurance remains for the life of the loan unless refinanced.

VA Loans: The Undisputed Power Tool

Best for: Veterans, active-duty service members, and eligible spouses.

Why VA Winsā€”Period

  • No down payment required

  • No monthly mortgage insurance

  • Strong appraisal protections

Real Example:
A relocating service member preserves cash for moving and upgrades while locking in competitive terms with zero down.

Watch out: VA eligibility and funding fee considerations.

Jumbo Loans: High-Income, High-Precision Financing

Best for: Doctors, executives, business owners, and luxury buyers.

Why Jumbo Works in 2026

  • Specialized programs for high earners

  • Asset-based and bank-statement options

  • Competitive pricing with strong financials

Real Example:
A physician buying a $1.2M home uses a jumbo loan with minimal down payment while retaining liquidity for investments.

Watch out: Documentation and reserve requirements.

Final Verdict: Who Wins in 2026?

  • Lowest lifetime cost: Conventional

  • Best accessibility: FHA

  • Best overall value: VA

  • Best for luxury buyers: Jumbo

The real winner is the borrower who matches the loan to their strategy, not the headline rate.

Call to Action

Choosing the wrong loan can cost you tens of thousands over time. A mortgage broker compares all four options simultaneouslyā€”so you do not have to guess.

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Ā© 2023-2024 Bill Rapp, Medallion Funds LLC, Director of Capital Advisory

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Bill Rapp - Commercial & Residential Mortgage Broker

Whether you're a first-time homebuyer, a seasoned investor, or a business owner with ambitious plans, securing the right financing is crucial. At Medallion Funds, we take the guesswork out of mortgages, offering a comprehensive suite of residential and commercial loan options to fit your unique needs. Looking for Your Dream Home? We understand the excitement and challenges of navigating the residential real estate market. Our experienced mortgage brokers will guide you through every step, from pre-qualification to closing. We offer a variety of loan programs to suit your financial situation, including: ā€¢ Fixed-rate mortgages: Offering stability with predictable monthly payments. ā€¢ Adjustable-rate mortgages (ARMs): Providing competitive rates for a set period. ā€¢ FHA loans: Making homeownership accessible with lower down payments. ā€¢ VA loans: Rewarding veterans with attractive rates and flexible terms. Investing in Your Business Future? Growth often requires capital, and we can help you unlock the potential of your commercial property. Our brokers specialize in a wide range of commercial loan options, including: ā€¢ Purchase loans: Financing the acquisition of new buildings or land. ā€¢ Construction loans: Facilitating the development of your project. ā€¢ Refinance loans: Restructuring your existing mortgage for better terms. ā€¢ SBA loans: Providing access to government-backed financing for qualified businesses. The Medallion Funds Difference: We go beyond simply finding a loan. We take the time to understand your goals and develop a personalized strategy. Here's what sets us apart: ā€¢ Expertise: Our brokers have a deep understanding of both residential and commercial lending. ā€¢ Competitive Rates: We leverage our strong lender relationships to secure the best possible terms. ā€¢ Streamlined Process: We handle the paperwork, keeping you informed every step of the way. ā€¢ Exceptional Service: We're committed to providing you with a positive and stress-free experience. Ready to Take the First Step? Contact Medallion Funds today for a free consultation. Let's discuss your financing needs and help you achieve your dreams!

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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 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/