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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1️⃣⚙️ Loan Types Explained in 60 Seconds — Your Fast Mortgage Guide ⏱️
1️⃣⚙️ Loan Types Explained in 60 Seconds — Your Fast Mortgage Guide ⏱️
2️⃣💡 Mortgage Loan Types Made Simple — What You Need to Know in 1 Minute 📉
⚙️ Loan Types Explained in 60 Seconds: Your Quick Guide to Smarter Borrowing
When you’re searching for a mortgage, it can feel like lenders are speaking a different language. Conventional, FHA, VA, Jumbo, Non-QM, DSCR — the list is long, and each comes with its own rules.
But here’s the good news: you can understand the major loan types in under 60 seconds.
Whether you're a first-time homebuyer, investor, or business owner, choosing the right loan is the key to lowering your payment, increasing your buying power, and qualifying without unnecessary stress. As a mortgage broker with access to hundreds of lenders, my job is to match you with the perfect fit — without the guesswork.
Let’s break down the most common loan types quickly and clearly.
🏡 1. Conventional Loans
Great for buyers with solid credit and stable income.
Best for: Primary homes, second homes, investment properties.
Why choose it: Lower rates, flexible terms, and no upfront mortgage insurance.
🧱 2. FHA Loans
Designed for buyers with limited credit or smaller down payments.
Best for: First-time homebuyers.
Why choose it: 3.5% down and flexible credit guidelines.
🇺🇸 3. VA Loans
Exclusive to qualifying veterans and active-duty military.
Best for: VA-eligible borrowers purchasing or refinancing a home.
Why choose it: 0% down, no PMI, and competitive interest rates.
💰 4. Jumbo Loans
For high-price homes that exceed conforming loan limits.
Best for: Luxury homebuyers and high-income earners.
Why choose it: Larger loan amounts and competitive pricing with strong qualifications.
📘 5. Non-QM Loans
Perfect for self-employed borrowers who don’t fit standard guidelines.
Includes: Bank statement loans, asset depletion loans, P&L-only loans.
Why choose it: Flexible documentation and income verification options.
📦 6. DSCR Loans (For Investors)
A fast-growing loan type for rental properties.
Why choose it: Qualify based on rental income — not your personal income.
🏗️ 7. Hard Money Loans
Specialty loans offering speed and flexibility for flips or bridge needs.
Why choose it: Fast closings, property-based underwriting.
🔍 Final Takeaway
Each loan type serves a different financial profile — and the best choice depends on your goals, credit, income, and long-term plans.
Medallion Funds helps you compare options from 600+ lenders so you get the right loan without stress or confusion.
Want the 60-second breakdown? Watch the YouTube video linked below.
Need a personalized loan match? Reach out anytime.
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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/