6 Do’s and Don’ts When Applying for a Mortgage Loan

6 Do’s and Don’ts When Applying for a Mortgage Loan

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Buying a house for the first time can be a daunting yet exciting experience. With a real estate being one of your most significant purchases, it only makes sense to feel overwhelmed when making the decision. However, for people who need financial assistance to buy a house, it’s easy to be intimidated and postpone the purchase.

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Are you keen on buying a house soon? Then it pays to learn about the common mortgage mistakes that most first-time home buyers make. Avoid these mistakes is by keeping the following do’s and don’ts in mind before, during, and after your mortgage application.

Do browse for houses for sale only after getting pre-qualified and getting pre-approved for a mortgage.

One common mistake most of the population make is going on a house shopping without checking if you qualify for a mortgage. Imagine looking for a house when you stumble one that you think is your dream house. You check the price and try to apply for a mortgage, only to get disappointed. Why? Because just when you found the home you want, you learned you couldn’t afford it. Getting a pre-approval and pre-qualification will give you an idea if you qualify for a mortgage, and how much you can afford to buy.

Don’t open new credit lines.

Opening new credit applications can affect your Debt-To-Income Ratio. Your DTI ratio is one of the things your mortgage lender will check when you apply for a mortgage.  Adding new credit lines increases your DTI ratio. The maximum DTI ratio will depend on the type of Mortgage Loans Arlington you’re applying for. However, going above the maximum DTI requirement can cost you your home loan application.

Good Read: Lower Your Debt-to-Income Ratio

Save more than your estimate mortgage fees.

Let’s say you applied for an FHA loan. You have a good DTI ratio, have a 580 FICO score and a good credit history.  This means you only need to save at least 3.5% for the down payment, right? Unfortunately, the other fees are not yet included in the down payment. You’ll also need to pay for the closing costs, private mortgage insurance, and other expenses before you move into your new home.

Don’t settle on a single mortgage lender.

Not all lenders are the same. They have different vision, values, and requirements. When looking for a lender who can finance Mortgage Loans Arlington, make sure to shop for mortgage lenders. Do your research, ask for recommendations, and consider the pros and cons of each lender before choosing one.

Explore the different mortgage options available.

Like lenders, there are different and affordable Mortgage Loans Arlington types to choose from. Aside from an FHA loan, consider exploring other mortgage options like VA loans or USDA loans. Each has its advantages and disadvantages. Check which one will better fit your needs and situation.

Don’t forget about First-Time Homebuyers Grants and programs.

For first time home buyers, you can take advantage of  First-Time Homebuyers Grants and programs. These aim to help first-time homebuyers buy a home without having to pay for a down payment. How does it work? The grant will cover for the down payment as long as your qualifications and can meet their requirements.

Good Read: 10 first-time homebuyer grants and programs

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