Applying for a Home Loan for the First Time? 5 Mistakes to Avoid Thinking of buying a home? You have to take three important steps to unlock the door to homeownership. Before choosing the licensed real estate agent and finding the right home, the first and foremost important step is getting approved for a mortgage. Applying for a home loan helps you to afford the down payment and closing costs of home loans, however, if you are applying for the first time, you need to be careful to avoid these five common mistakes.
1. Searching for a home before applying for a loan Buying a home must begin with a mortgage prequalification and not with a home searching. It is important to expose your financial situation in front of your lender to get preapproved first, before looking for a home. 2. Make yourself eligible for a mortgage Your credit report and your debt-to-income ratio define the relationship between how much money you owe and how much money you are getting in your pocket. Your lender analyzes these factors to understand if you qualify for a loan and to identify what the rate will be.