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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š¦ Why Life Insurance Companies Are the Unsung Heroes of CRE Lending š¼
š¦ Why Life Insurance Companies Are the Unsung Heroes of CRE Lending š¼
š° Stable, Long-Term, and Low-Risk: Why CRE Investors Love Life Company Loans š¢
š¦ Life Insurance Companies as CRE Lenders ā Why Investors Love Them
When most investors think of commercial real estate (CRE) financing, they picture banks, CMBS lenders, or private debt funds. But behind the scenes, life insurance companiesāor ālife cosāāhave quietly become some of the most stable, competitive, and investor-friendly lenders in the industry.
Letās break down why savvy borrowers and mortgage brokers often seek them out first.
š¼ What Are Life Insurance Company Loans?
Life insurance companies manage massive investment portfolios that must produce predictable, long-term returns to match future policyholder obligations.
To achieve this, they invest heavily in commercial real estate loansāfavoring high-quality, low-risk properties with strong tenants and predictable cash flow.
These loans are typically:
Ā·Conservative in leverage (50ā65% LTV)
Ā·Fixed-rate for 5ā30 years
Ā·Non-recourse, protecting borrowersā personal assets
Ā·Amortizing, reducing risk over time
In short: life cos act more like institutional bond investors than aggressive lenders, making them perfect partners for borrowers seeking rate stability and portfolio diversification.
š Why Borrowers Love Life Company Financing
1.Lower Interest Rates ā Life companies often beat banks and debt funds on pricing for stabilized, income-producing assets.
2.Long-Term Fixed Rates ā You can lock in rates for 10, 20, or even 30 yearsāideal for core assets and generational holdings.
3.Non-Recourse Loans ā Youāre protected from personal liability if the property underperforms (as long as thereās no fraud or misrepresentation).
4.Flexible Prepayment Options ā Many offer yield maintenance or step-down structures to accommodate sales or refis.
5.Stability & Certainty of Execution ā Life companies are portfolio lenders, meaning they hold loans on their balance sheets. That translates to smooth closings and fewer surprises.
š¢ Ideal Property Types for Life Company Loans
Life insurance lenders typically favor Class A and strong Class B properties in major or secondary markets with proven stability.
Their sweet spots include:
Ā·Office (well-leased or medical office buildings)
Ā·Industrial (distribution or manufacturing facilities)
Ā·Multifamily (core or stabilized suburban properties)
Ā·Retail (grocery-anchored centers)
They generally avoid construction or transitional dealsābut theyāll compete aggressively for stabilized, income-producing properties with strong fundamentals.
āļø When Life Co Loans Beat Other Options
Life insurance companies often win deals when:
Ā·The investor wants low leverage and long-term stability.
Ā·The property is core or core-plus with consistent occupancy.
Ā·The borrower values relationship lending and non-recourse structure.
By contrast, banks and bridge lenders usually take the lead when the property needs renovation, lease-up, or repositioning.
š” The Medallion Funds Advantage
At Medallion Funds, we work with hundreds of institutional capital sources, including life companies, pension funds, and credit unions.
Our role is to match each clientās investment goals and hold period with the right lender and structureāensuring the best rate, leverage, and terms possible.
If you own or are acquiring a stabilized CRE asset, itās worth exploring life insurance company financing. You might be surprised at how competitive it is.
š Bottom Line
Life insurance companies may not advertise on every corner, but theyāre a powerful and reliable source of CRE capital.
In uncertain rate environments, they offer what every investor craves: long-term stability, strong underwriting, and predictable performance.
If youāre considering your next acquisition or refinance, let Medallion Funds shop life co options for you.
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Ā© 2023-2024 Bill Rapp, Medallion Funds LLC, Director of Capital Advisory
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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/