Will your home be a blessing or a curse? Your answer may depend heavily on the terms of your mortgage. Those who purchase property within their budget at a low interest rate might feel like they’re living the dream, while anyone who bought a house they couldn’t afford using a mortgage they didn’t understand will likely share a story of tears and regret. If you’re ready to take on homeownership, be sure to avoid these mortgage mistakes.

Not reviewing your credit before applying for financing. Your credit score has the biggest influence on your mortgage rate. The higher your score, the lower the interest rates you’ll see. A few months before you begin house shopping, go to www.annualcreditreport.com to access free credit reports from each of the three main credit reporting agencies. If you find errors, get them corrected before applying for a loan. You will also want to review your credit score. With a score of 720 or higher, most lenders will offer you their best rates, while a score under 620 will make mortgage financing difficult to obtain.

Not getting preapproved. What you think you can afford for a mortgage and what your bank will let you borrow may be two very different numbers. Don’t waste time looking at homes and neighborhoods if you have no real idea how much you qualify for. Prequalification can also give you an edge in many markets, since a seller may not accept an offer without proof of preapproval.

Not shopping for the best rate. The mortgage rate dramatically impacts how much you ultimately pay for your home, so it makes good sense to shop around for the lowest rate you can qualify for. Be sure you provide each lender with the same information and ask about the same type of loan for comparison purposes. City Bank would be happy to provide you a free quote on competitive rates for home mortgage loans.

Not paying attention to the fees. Many borrowers don’t realize that some closing costs and fees can be negotiated with a lender. Keep an eye out for application, processing or underwriting fees, which are unnecessary and can add up quickly. As you speak with lenders and ask for rates, also ask for an estimate of closing costs. Dispute any cost that seems excessive or doesn’t make sense.

Buying a New Home?

Whether you want to buy, build, refinance or just find out if you pre-qualify, City Bank will guide you through the process one step at a time. Our secure online application process allows you to apply for a mortgage loan on your schedule, 24 hours a day! You can also schedule a time for a free consultation about mortgage loans in College Station, Dallas, Lubbock and many other communities throughout Texas and New Mexico.