Going in Blind
Do you know your credit score? Before you even think about applying for a mortgage, you should order your credit report and FICO score. You can get your credit report for free once a year, or you can pay for it if you need to follow it more often. Getting this information six to eight months ahead of when you apply should give you enough time to improve your score or fix any errors on the report.
Confusing the PRE
Are you PREapproved or PREqualified? It is better to be preapproved when you want to start looking at homes since it means you have got the thumbs up from a lender. It is not a for sure promise, but it does assure that you have at least been through the first set of requirements in getting a loan.
Cart Before the Horse
Have you already found your perfect dream home? The mortgage process can time some time and real estate brokers will be more willing to work with you if you are already preapproved. Do not even start to look at homes until you have secured the financing with preapproval.
Getting in Deep
Although lenders have become more cautious, in general they are still willing to lend more than many home owners should spend for a home. Some new homeowners are surprised by the increase in expenses of owning vs renting. Insurance, utilities, repairs all add to the monthly budget and should be accounted for in determining the upper end of price range for house shopping.
Be a smart with your money and avoid these mistakes.
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