Mistakes to avoid when getting a mortgage?

[Anonymous]

Pull reports yourself and know what is on your credit report and what to 'clean up'

Save every extra dime you can.  The more you have stocked away the better - even if you don't need it for closing/down payments - you'll need money for movers/truck/pizza and beer for the friends that help - as well as incidentals you forget about - like needing a trash can for outside - or something!

Make a list of questions you have and know who/where to ask.    I started asking on here - and then finally contacted a LO at MY bank because of some local programs that I qualify for.   She helped me with some other stuff so that I know what I need to do before I even try to prequalify. 

Find out what houses cost in the area that you want to live.   You don't want to find the dream house only to discover you can't afford the area.   Be realistic.

Take your time and breathe!   Buying a house can be very stressful - try to have as much lined up ahead of time to make it as easy as possible.   It will make the process much more fun.

[disdreamin]

Our main thing we learned was that buying a house was MUCH more expensive than we ever anticipated. Make sure you have a fair amount of savings socked away for incidentals, as someone already mentioned. There are so many little - but expensive - things that can come up.

Also, look into small local banks and CUs. We ended up with a mortgage broker (someone who essentially just shopped us around - they didn't originate loans, just located lendors) and we ended up with the best deal at a small local bank that doesn't sell their notes. We are still with them, two refi's later! They were STILL the best deal in town, bar none, when I did the refi's.

While you are doing the things you need to do to be ready, look at houses. Go to open houses, go to model homes that are open, and just see what you like and what you don't like. Make a list of must-have's and wants. Be prepared to be flexible, but make sure you don't give on any of the MUST-HAVE things! If it is an absolute necessity, you won't may not be happy with the home long term.

Lastly, I'd recommend taking out the shortest term loan you can possibly afford. I dearly wish we'd started with a 15 year mortgage. I would rather have had less house and had it paid for sooner than be looking at another 20 years and having made almost no headway to date on principal. Take a look at an amortization table for kicks, and see what you've accomplished in 5 years on a 30-year versus 5 on a 15-year mortgage. It's horrifying to see how much goes to interest on a 30-year the first 10 years or so.

[happy0510]

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@birjest wrote:

Make sure you have no lates in the past 36 months, unless the rules has changed.  Also, clear any colllections or judgements on your report.....

NO NEW CREDIT CARD OR ACCOUNT......NO-NO

If you have any blemish, be prepared to explain and writes letters about them.  Fairly easy, just give the UW a warm fuzzy feeling about you.

Oh yes, depending on the type of cloan you applying for:  DTI!

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FYI, although this is great advice, it is technically only 12 months of no lates! Unless it changed from 5 years ago?

[Anonymous]

Thanks, bought a house in LA and will be moving next week.

[birjest]

No, it is great advice, which why I gave a disclaimer. It is 12 months, however, if one has a foreclosure, deed in lieu, or repossession, that will have to be explain and throughly researched for the UW.