10 biggest mortgage mistakes
Failing to get preapproved for a home loan
Educated borrowers look at their budgets and calculate how much they can afford to spend before they go house shopping.
But knowing what you can afford isn’t the same as knowing what the bank will let you borrow based on your income, debts, credit score and current lending conditions.
Often, consumers will go house shopping and find the perfect home before visiting a lender, says Richard Whitman, vice president of mortgage lending at Texas Trust Credit Union in north Texas. They don’t keep track of their credit and aren’t aware that it isn’t where it needs to be to qualify for a mortgage.
With no real idea of what a bank will lend you, you might be looking at homes and neighborhoods for which you'll never be able to get a loan.
And in competitive markets, sellers won’t take your offer seriously without proof of preapproval.
Talk to at least three lenders and get preapproved. It’s free and lets you make a competitive bid.