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- Speak to a lender before finding your dream home: It’s very important to meet with a lender to determine if you are approved for a home loan and if so, how much. Meeting with a lender prior to looking at homes ensures that you don’t fall in love with a home only to find out you are unable to purchase it. Knowing the details of an approval also allows you to search for homes in your price range.
- If your credit history isn’t great, still meet with a lender: Even with less than great credit, there still may be options to getting approved for a loan. Take the first step and meet with a lender to determine what your options may be, with great credit or not.
- Know the difference between your credit score and your credit history: Obtaining your credit score and then proceeding to go through with the home buying process may not be such a good idea. Your credit score is important but so is your credit history and it’s important to know what your history is before settling on a home. Don’t make the mistake of knowing your credit score and then finding your dream home only to find out that your credit history is filled with unresolved bills or errors.
- Don’t max out credit cards after being pre-approved: Your credit will most likely be checked right before closing on the home so be mindful of that before making large furniture or appliance purchases for the home.
- Pre-qualification vs. pre-approval: Getting pre-qualified is only the very beginning and does not mean you are officially approved for a loan. Many times, getting pre-qualified can be done over the phone and is only a vague glimpse into your financial situation. Getting pre-approved usually involves filling out an actual mortgage application and taking a more in depth look at your financial picture.