Mortgage Mistakes That Can Cost You

If you're interested in buying a house, then you probably already know that getting a mortgage can be no picnic.

Your mortgage is almost certainly the largest debt you will ever take on, and like any major life decision, it makes sense to do plenty of preparation before you take that leap. If you do your homework — and avoid these common mortgage mistakes — you'll be well on your way to buying a house.

1. Not Having Your Finances In Order
   Before you ever set foot in a lender's office, you need to have your financial ducks in a row. Have all your paperwork handy, obtain a credit report, and take any necessary steps to improve your credit and financial standing before you start applying for a mortgage. If you don't, you could end up getting a pretty rough deal or even being rejected altogether.
   
   
2. Borrowing Too Much
   At the end of the day, your mortgage is a debt that you will have to eventually pay off. So why take on any more debt than you have to? Be honest with yourself about what you can afford. As a general rule, your housing costs should not exceed 30 percent of your take-home pay. Any more than that, you run the risk of making yourself "house poor," which puts you in a very precarious financial position.
   
   
3. Looking for a House Before Getting Pre-Approved
   Looking at houses without being pre-approved for a mortgage is like going to the grocery store without knowing how much money you have in your wallet. There's a good chance you'll be in for a shock when you get to the check-out line. Getting pre-approval will give you a solid idea of how much a lender will be willing to offer. And while this number is not entirely set in stone, it's enough to let you know which houses you definitely can't afford.
   
   
4. Not Shopping Around
   For many prospective homeowners, getting a mortgage isn't easy. So it's tempting to jump at the first offer that comes along. After all, it might be the only offer you get, right? That's not necessarily the case, and it's important to remember that just because you've been offered a mortgage — even one that seems like a good deal — doesn't mean you have to take it. Shop around. Do your homework. Talk to multiple lenders. You may be able to get a mortgage with better rates and better terms than you thought possible.
   
   
5. Putting Too Little Down
   It goes without saying that the more you pay for your house upfront, the less you'll have to pay later, but it's far too easy to put down the smallest possible down payment without really considering the consequences. As a general rule, you should be able to put down 20 percent of a home's cost upfront. If you don't have that much on hand, it's worth taking the time to save it up. Most lenders require you to put 20 percent down to avoid mortgage insurance, an expense that only increases your monthly mortgage payment.

Getting a mortgage is a major accomplishment and an important step on the road to buying a house. By avoiding these common mortgage mistakes, you'll be well on your way to making your dream home a reality.

• Spring Décor Updates to Brighten Your Home
• Simple Daily Habits to Maintain a Cleaner Home
• Don't Let Winter Win: How to Freeze-Proof Your Garage
• How to Extend the Life of Your Water Heater
• Winterproofing Windows and Doors: A Guide to Keeping the Cold Out
• How to Future-Proof Your Home for Changing Needs
• Home Happiness 101: Small Upgrades That Can Make Every Day Feel Better
• Fall Cleaning Tips For Decluttering Before the Holidays
• How to Create a Cozy Fall Retreat in Your Backyard
• Why Fall is Prime Time for Window Replacement

• Tips for Transitioning Your Closet From Summer to Fall
• Why September Is the Best Month to Paint Your Home's Exterior

• The Best Home Styles for Enjoying Spring Weather
• What to Do the First Week in Your New Home
• What to Know About Using Gifted Funds for a Down Payment
• What to Know About Using Gifted Funds for a Down Payment
• How to Research Crime and Safety
• What Buyers Need to Know About Home Warranties
• Browsing for Homes Online? Follow These Shopping Tips
• How to Look Past Bad Staging
• What Happens If Interest Rates Change After You Buy?
• How to Compare Two Homes You Love

• Post-Holiday Finances: How to Reset Your Budget for Home Buying
• New Year, New Home: How to Set Smart Home-Buying Goals for the Year Ahead

• Packing Tips for Sellers: Preparing for a Spring Move
• What to Store, Donate, or Toss Before Listing
• What Buyers Notice First in Listing Photos
• How Spring Sellers Can Enter The Market With Confidence
• Tax Considerations Home Sellers Should Know About
• The One-Room-at-a-Time Spring Prep Strategy
• What's the Difference Between Listing a Home and Marketing It?
• How to Respond to Buyer Feedback Without Panicking
• Transparency Builds Trust: Why Honesty Sells Homes Faster
• Winter Selling Myths That Shouldn't Keep You From Listing

• The Value of Local Market Knowledge When Selling Your Home
• Selling in Snowy Conditions: Safety, Access, and Presentation Tips