Getting ready to buy your first home is a huge moment, but it also means getting mortgage-ready. While that can often come with a few challenges, the best things in life always do.  That’s why we’re here to help you navigate the process. In this article, we’ll cover some of the most common purchasing pitfalls that could impact your ability to secure a mortgage — and the four ways to avoid them.

Check the score

Your credit score is the first thing many lenders will examine to determine whether you qualify, and errors and derogatory marks could cost you money and keep you from qualifying. Avoid this pitfall by taking steps to improve your score and seeking out a pre-qualification before you start the official house hunt.

Be sure to look out for these common errors that can be found on credit reports:

Incorrect personal information

This could be a sign of identity theft —  always dispute incorrect personal information. The best way to get it fixed is to write to the credit reporting company directly and let them know what information you think is incorrect.

Incorrect limits/balances

Your income limits and balances change when you open or close credit cards, so if you see something that looks out of place, report it to the credit reporting company immediately.

Duplicate accounts/debt amounts

Duplicate accounts or duplicate debt amounts are always a mistake on a credit report — and not a harmless one. If you see one when looking at your credit score, always report it to the credit reporting company.

Get up on your down payment

Putting the right down payment on your mortgage won’t only get you started on paying your house off, it will also set you up to receive more favorable loan terms from lenders. Conventional wisdom says to plan on putting 20 percent down on your first house, but mortgage plans aren’t one size fits all. Coming up with such a large sum may seem daunting, but it might be more attainable than you think.. Down payment assistance programs and grants for first-time buyers are a great way to go for those just getting in the market.  

Navigate appraisal surprises  

You’re pre-approved. Your offer has been accepted. But your dream home’s appraisal comes back too low and your funding is now in jeopardy. Now what? You may not be able to completely avoid surprises like this, but there are a few things you can do when the unexpected happens.

Be sure to examine the appraisal for discrepancies

The appraiser is only human, so there’s a possibility that they made a mistake or two on the appraisal. Placing your home in the wrong neighborhood, listing fewer bedrooms or bathrooms, and calculating the wrong square footage are all examples of human error that can impact the value of your home.

Consider asking for a price reduction

They’ve already accepted your offer and are likely just as excited to sell as you are to buy. It never hurts to ask, and you could end up with a better deal than the original.

Ask your lender about other financing options

Mortgage lenders typically offer a lot of different financing options, and when one door closes, they’re usually good at opening another. Make sure to carefully review whatever they offer you, and make sure whatever financing option you choose fits your current and future budget.

That said, don’t hold yourself back by only looking at one home. Ultimately, you may be faced with a home that is unsuitable post-inspection. As important as it is to act quickly, it’s just as important to know when to walk away.

Don’t get penalized

Once you’re in your dream home, your next thoughts will likely be paying off your mortgage as quickly as possible. But depending on the terms of your home loan, you may be subject to early payment fees. Avoid this pitfall by talking to your lenders about prepayment options upfront, and choose the loan that’s right for you.

Buying your home is an exciting first step toward financial freedom. The process can be complicated, but when done correctly, the feeling of achievement you’ll get is one you’ll always remember. Understanding the complexities of homebuying can put you on the path to finding — and funding — your dream home. Check our latest home loan product information at efirstbank.com and stop by one of our branches to speak to a FirstBank representative today.

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