Today, almost everyone takes a mortgage to buy a home. However, before doing so, you need to ask and understand all about the mortgage process. Many who go for a mortgage loan make some common mistakes that can cost them way more than anticipated.

Buyers need to be aware of these mistakes while applying for a mortgage. Some of the common mistakes that people make are:

Avoiding a local mortgage company

A local mortgage lender can provide quality rather than one that is located elsewhere. Many make the mistake and avoid local companies. The real estate market is different in every area, and asking a real estate company from another area is never a smart idea. There are several ways to find a local mortgage company. Moreover, you can ask a real estate professional to recommend a company.

A pre-qualified and pre-approved mortgage
A mortgage has to be pre-qualified and pre-approved. Pre-qualification makes the mortgage as only good as the paper it is written on. The pre-qualification is done without any research and is based on the information given by the borrower. It is understood that the borrower will be 100% honest, which is not always the case when getting pre-qualification.

A pre-approval, on the other hand, is recommended. A pre-approval is given only after the lender reviews the financial information, credit reports, tax returns, and payment stubs by the borrower. Real estate agents ask for a mortgage that is pre-approved and increase the borrower’s chances of securing his/her finance. Not getting a pre-approval for a mortgage is a big mistake, as you may end up paying dividends while buying a new home.

All mortgages are identical
Many assume that all mortgages are identical with identical lender rates and terms. However, that is far from the truth. Firstly, you need to decide which type of mortgage you need. You have to decide if you require a 15-year or 30-year mortgage, conventional or FHA mortgage, or an adjustable-rate or fixed-rate mortgage. Mortgages are adjustable and differ.

You do not need to put money down
There are mortgage products that allow you to buy a home with little or no money. You need to compare the mortgages for small down payment loans. If you cannot buy a house with a large down payment, you can go in for the small or no money as a down payment as well. Many buyers may choose to pay no down payment, but this is a mistake that you will make while taking a mortgage.

Do not ignore credit history
Credit history has an impact on the borrower’s ability to take a loan and determine the mortgage rate. Ignoring the credit score is a mistake while taking a loan. A buyer/borrower should be aware of his/her credit score. It is the first step to get approval for a mortgage; the lender may review your credit score. There are three credit bureaus Experian, Transunion, and Equifax which have put forward one single report called the Tri-merge credit report. So, do not decide without taking professional help as it could lead to a rejection of a loan.