It's possible that you'll only go through the home buying process once or twice in your lifetime, which means there are very few opportunities to learn from your mistakes. The first time you secure a mortgage for a home, you may be confused about the entire process. It's possible that you'll learn a lot of information along the way that would have made the process much easier. Here are a few key things to know when getting your first mortgage.
Your Credit Is Checked Multiple Times
There will be several points during the home buying process where your credit will be checked to secure your mortgage. The lender will check your credit when you get pre-approved for the loan, which is when they decide based on an initial look at your finances if you will be approved for the loan. You will also have the credit checked again right before you close on the home. This is to help catch potential problems where a person's credit has changed by the time the loan is approved.
Be aware that any major changes in your credit would be a red flag for your mortgage. A common mistake is opening additional lines of credit or making some big purchases on your credit card. As tempting as it may be to buy home renovation items while they are on sale, know that it could affect the approval of your loan. Try to put off those purchases until after you close on the home.
If you do need to make a big purchase, such as buying another vehicle because your current vehicle is not working anymore, make sure to let your mortgage lender know immediately.
Your Pre-Approval Value Only Applies To The Mortgage Amount
A common mistake people make is thinking that their pre-approval amount is for the total value of the home you are purchasing. For example, if you are approved for a $300,000 loan, then you could buy a $300,000 home. This is simply not true. The pre-approval amount is for the value of the loan you will receive, not the home's selling price. If you manage to put a $50,000 down payment on a home that costs $350,000, then you could still use a mortgage to secure the $300,000 in financing that you need.
Reach out to a mortgage specialist for more things you should know when getting your first home mortgage.Share