Is buying a new home your most prominent New Year’s resolution? Whether you’re a first-time homebuyer or a seasoned vet, missteps can happen during the home buying process — particularly during the mortgage-finding phase. Hoping to avoid the traps other prospective homeowners have fallen into along the way? Learn from their mistakes so you don’t miss out on the home of your dreams. Keep reading for the top mortgage blunders we’ve seen over the years (and how to evade them at all costs).

Not sure if you should work with a mortgage broker? Click here to read our advice on the topic.

#1 Not Checking and Improving Credit Score: Many people don’t check their credit score before applying for a mortgage, but we recommend reviewing it far in advance. That way, if it’s low, you can take steps to improve it by paying off debts and resolving any discrepancies!

#2 Overlooking Pre-Approval: Rather than skipping the pre-approval process altogether, it’s wise to get pre-approved before house hunting. That way, you’ll understand how much you can afford, which will ultimately make your offer infinitely more appealing to sellers.

Have other questions about the mortgage process? Check out these other blog posts.

• Everything to Know About Mortgages Today
• How Much Mortgage Can I Afford?
• How to Buy and Sell at the Same Time

#3 Ignoring Your Budget: Not considering the long-term impact of the mortgage on your budget is a misstep with catastrophic implications. Our advice? Determine a realistic budget that includes mortgage payments, property taxes, insurance, and maintenance costs. Don’t forget to account for potential changes in income, too.

#4 Neglecting to Shop Around: Accepting the first mortgage offer you get without shopping around might sound like it would save you time — but it can actually end up costing you more stress down the line. Obtaining quotes from multiple lenders to compare interest rates, terms, and fees, however, can and will safeguard your money over the lifespan of your loan.

#5 Not Understanding Mortgage Terms: This just in: Signing a mortgage without understanding the terms and conditions first is a risky move. Instead, you should thoroughly review the terms, interest rates, fees, and any penalties. Seek clarification on anything you don’t understand, and don’t hesitate to consult with a financial advisor if needed.

#6 Choosing the Wrong Loan Type: Opting for a mortgage without considering your financial situation and future plans is, as you can imagine, one of the biggest homebuying missteps you can make. How can you avoid it? Make sure you understand the differences between fixed-rate and adjustable-rate mortgages, and choose the one that aligns with your financial goals and risk tolerance.

#7 Skipping the Home Inspection: Rather than foregoing a professional home inspection, you should always schedule one before closing. This helps to uncover potential issues with the property that may affect its value and your decision to move forward.

In need of home buying advice? We’ve got plenty of helpful resources on our blog. Check out these posts.

• How Many Homes Should I Tour Before Submitting an Offer?
• How to Buy a Home with No Money Down
• Can You Buy A Home Over The Holidays?

#8 Not Saving for Closing Costs: There’s just no getting around it: Underestimating closing costs will cost you. We advise that every client start saving for closing fees up front, which typically include fees for appraisals, inspections, and legal services. Knowing the full scope ahead of time allows you to be financially prepared when it counts most.

#9 Making Financial Changes: Making significant financial changes during the mortgage process can impact your eligibility. The solution? Avoid large purchases or changes in employment during the mortgage application process to ensure nothing stands in the way of you and your future home.

#10 Ignoring the Fine Print: Like in any important transaction, it’s critical to read and understand all the details in the mortgage documents before signing your name. If anything is unclear, seek legal advice, since understanding the terms is key to avoiding surprises later on.

Looking to buy a home? We can help! Give us a call today at 202.280.2060 or email us at jsmira@jennsmira.com to get started!