General Information - Five Mortgage Mistakes First-Time Buyers Commonly Make



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Five Mortgage Mistakes First-Time Buyers Commonly Make

 

As a first-time buyer, you have likely been closely monitoring your finances to improve your chances of getting approved for a mortgage loan. The Nest offers advice on what five mortgage mistakes prospective buyers often make, so you can avoid making these common errors.

As a first-time buyer, you have likely been closely monitoring your finances to improve your chances of getting approved for a mortgage loan. The Nest offers advice on what five mortgage mistakes prospective buyers often make, so you can avoid making these common errors.

1. Ignoring your credit history - Since your credit history and score factor into the rate offered by lenders, you should make sure yours is at its best. This can be done by reviewing a copy of your credit report well before beginning your home search, while altering your money management habits regarding your credit to pay down balances can also help improve your score before applying.

2. Overspending for a dream home - Another big mistake first-time buyers make is stretching their budget to make their first home their dream home. The source suggests investing in a smaller home that may not cost as much, as there are many other housing expenses first-time buyers may not be aware of, including property taxes, the cost of maintenance, closing costs and other fees. Not factoring these into your budget when deciding on a price range can result in having a house that is too expensive and you won't be able to maintain.

3. Not getting preapproved - There are many advantages of getting preapproved versus waiting to apply for a mortgage loan after finding a house. While getting prequalified can help you set a realistic price range, getting preapproved uses detailed financial information for an actual loan amount. Sellers will likely take offers from preapproved buyers more seriously, as they know they won't have to wait to see if the buyer actually gets approved later.

4. Not taking advantage of federal programs - There are plenty of programs that are designed to directly benefit first-time buyers, including special loan offers and other federally-funded housing programs. You should also remember any tax breaks that are available when you purchase your home, and make sure you keep all the paperwork to prove it to the IRS later.

5. Accepting the first or lowest loan - While getting approved is exciting, you should shop around to obtain the lowest mortgage rate. If one lender approved, you will likely earn approval from another, so be sure to compare both rates and conditions of the offers. Before signing on, make sure additional fees and expenses don't offset the low interest rate offered.

For consumers interested in new homes for sale in Florida, it's important they know how to move through the process. GL Homes can help consumers know what the latest trends are for homes in Florida so they know exactly what they want in their new home.