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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š¼ What is a Non-QM Loan? Discover Why High-Income Earners Should Consider It š”
š¼ What is a Non-QM Loan? Discover Why High-Income Earners Should Consider It š”
š Non-QM Loans Explained: Smart Mortgage Options for High-Income Professionals š”
š What is a Non-QM Loan and Why High Earners Should Consider It
When it comes to mortgage financing, not all borrowers fit into the traditional lending box. High-income earnersāsuch as doctors, business owners, investors, and self-employed professionalsāoften find themselves penalized by conventional guidelines. Thatās where Non-QM (Non-Qualified Mortgage) loans step in.
What Is a Non-QM Loan?
A Non-QM loan is a type of mortgage that doesnāt conform to the Consumer Financial Protection Bureau's (CFPB) qualified mortgage guidelines. These loans allow lenders to be more flexible with underwriting criteria, making them ideal for borrowers with non-traditional income or unique financial profiles.
Who Benefits Most from a Non-QM Loan?
If you're a high earner but donāt receive a steady paycheck or have substantial write-offs on your tax returns, a Non-QM loan can be the perfect fit. Ideal candidates include:
Ā· Self-employed professionals
Ā· Physicians, attorneys, and dentists
Ā· Real estate investors
Ā· High-net-worth individuals with complex financial portfolios
Ā· Foreign nationals with U.S. property interests
Why Consider a Non-QM Loan?
1. Alternative Documentation
Use bank statements, asset depletion, or 1099 income to qualifyāno W-2s required.
2. Credit Flexibility
Recent credit events like foreclosures or bankruptcies donāt automatically disqualify you.
3. Investment Property Leverage
DSCR (Debt Service Coverage Ratio) options allow qualification based on rental income.
4. Higher Loan Amounts
Perfect for luxury homebuyers or professionals in high-cost areas needing jumbo financing.
5. Flexible Terms
Interest-only options, 40-year terms, and non-traditional amortization schedules are available.
Final Thoughts
Non-QM loans open doors for high-income earners who are often overlooked by big banks. At Medallion Mortgage, we specialize in structuring these flexible loan programs to match your financial goalsāwhether itās a new primary home, investment property, or vacation retreat.
š Let us help you qualify for the right loanāon your terms.
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Ā© 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 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/