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7 Critical Home Buying Mistakes to Avoid

Jul 15, 2008
1. Have your credit checked early in the process. Most people do not know their credit scores or what really determines a good credit score. It is not enough to get a free credit report from a single credit reporting agency. It is important that you have a mortgage planner obtain a tri merge report. This will provide scores from all 3 reporting agencies. Typically the lender will take the middle of the three scores when qualifying an applicant. It's important to determine if there are credit issues early on. Many times they can be corrected in a matter of weeks and will raise your score. A low credit score can cost you many thousands of dollars in mortgage interest.

2. Do not use your credit to make new purchases prior to closing. As you get closer to buying your new home you will begin to picture all the new needs of that home. New furniture, appliances or maybe even how a new car will look in the driveway! Don't laugh, more than one of my past clients has done that. Be careful not to accumulate any new debt prior to closing. New debt lowers credit scores and makes qualifying more difficult.

3. Know the level of experience of your Mortgage Planner. Many people have a friend or relative that's "in the business". Typically this is a licensed but inexperienced person earning some money part time. Your home is the largest investment you will ever have so it is vital to deal with an experienced person. Ask your Mortgage Planner about their credentials. How many families have they served? How long in the business? What is their experience level with the products or programs that you need. Your Mortgage Planner will be handling your hard earned money - be sure that you have confidence in their ability.

4. Do not think there are only 1 or 2 loan options available. Many buyers are unaware of the different loan options available to them. It is easy to see on the news the challenges in mortgage finance and assume that you will need 10% - 20% down payment to purchase a home. There are still excellent home loan programs available even with ZERO down payment. Speak to a qualified Mortgage Planner to review all your options.

5. Not knowing what affects your Credit. Subtle changes in your credit can affect your score dramatically. Be careful not to have your credit "pulled" too many times. Each lender you speak to will want to pull your credit. As each one does your score may drop. Do not close accounts or open new ones prior to obtaining your mortgage. Closing credit card accounts actually drops your score so never do this prior to closing.

6. Do not Purposely leave out important credit details. Your Mortgage Planner is on your side. Past credit problems may be embarassing but they will show up somewhere down the road. Be sure to explain everything so you can have a plan of action ot overcome it. Give them the information so they can provide you with the best possible interest rate and service.

7. Be sure to get a Mortgage Pre-Approval. A mortgage pre-approval is a fast and simple process that cannot be overlooked. A seller will want to know that you haev preapproved prior to negotiating a price with you. The preapproval shows the seller that you are not wasting their time and are negotiating in good faith. It will also give you a great sense of security as you are shopping for your dream home.
About the Author
If you are in the early stages to Buy a Home then Visit Rob Kosbergs' Complete FREE Report on Buying your Dream Home with a Zero Down Mortgage or for up to date Mortgage info visit his Mortgage Blog
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