Applying for a Mortgage? Avoid These Common Mistakes

If you're a first-time buyer, an itch to start looking at homes typically starts just after you make the decision to buy. The feeling may be so overwhelming that it's the very first thing you do. That's mistake number one: Looking at homes without knowing how much you can spend on a home isn't just a mistake, it's silly.

So, how do you know how much you can spend? By visiting a lender and getting preapproved for a mortgage. Sure, it's not as exciting as actually looking at houses, but it's the first step in a process that, if not followed, presents plenty of potential pitfalls that may make it impossible for you to purchase a home.

Before you put pen to paper, though, signing away a big chunk of your salary for the next 30 years, do yourself a favor and prepare.

Check Your Credit

Did you know that up to 79 percent of Americans' credit reports contain errors? That's why it is so important that a lender do this before you step foot into a seller's home!

When applying for a mortgage review your credit

Tell the Truth

Obtaining credit is nowhere near as easy as it once was. Although you may be tempted to stretch the truth on your application to get the loan, DON'T. The lender will dig up the truth, and you will be denied.

Don't Make Major Purchases

House hunting is exciting and shopping for the new house is probably top-of-mind. Don't do it.

If new debt is high enough to change your debt-to-income ratio, you may no longer qualify for the mortgage. So keep the credit cards tucked away, until after escrow closes.

The loan application process isn't nearly as glamorous and exciting as touring homes and shopping to outfit the new home, but it's the most important step in the process. Don't make any major financial or life changes between applying for the mortgage and closing escrow, and you should have no problems.

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