The Top 4 Mortgage Mistakes to Avoid (And How to Save Thousands!)

Picture this: You've found your dream home, and the excitement is real. It's tempting to rush through the process and seal the deal ASAP. But hold on! While acting quickly is important, hasty decisions can lead to costly mistakes. Let's dive into the four biggest mortgage blunders and how you can dodge them.

Mistake #1: Not Shopping Around for Mortgage Offers

I get it. When you're eager to lock in your new home, the first mortgage offer might seem like a gift from the heavens. But wait! According to a LendingTree study, over half of buyers (54%) do just that—settle for the first offer. 

Jacob Channel, a senior economist at LendingTree, sums it up well: “Different lenders can offer different rates to the exact same borrower. The first rate you’re offered may not be the lowest one you can get.” 

Think about it like this: If you only check prices at one store, you might miss out on a better deal elsewhere. The same goes for mortgages. Even a slight difference in interest rates can save you a bundle over time. In fact, 45% of those who shopped around found better offers, saving themselves thousands.

*Quick Story*: Just last month, I helped a young couple buy their first home. By comparing three different lenders I regularly work with, they secured a loan 15% lower than the others. That seemingly small difference? It will save them thousands over the life of their loan!

Mistake #2: Relying Solely on Recommendations

Sure, trusting your real estate agent’s recommendations is great—we’ve built strong relationships with lenders to benefit you. But if you only consider one lender, you're potentially limiting your options. Each lender offers different tools and rates for securing a mortgage.

*Insider Tip*: I always recommend checking in with at least two different mortgage offers. The lenders I work with each have unique benefits and work hard to get the best loan possible. However, even I don’t know which one will offer the lowest rate for every loan! Diversifying your options is key to snagging the best deal.

Mistake #3: Ignoring Different Loan Types

Not all mortgage loans are created equal. Beyond the classic 30-year fixed-rate mortgage, options like adjustable-rate mortgages (ARMs), FHA loans, VA loans, and USDA loans each have their own perks and downsides. Ignoring these choices might mean missing out on a loan that fits your financial situation better.

This is another reason shopping around is crucial. Each lender may offer access to different loan types. A thorough discussion will help you understand which loan aligns best with your needs.

Mistake #4: Not Considering Future Financial Plans

When choosing a mortgage, think long-term. Are you planning to stay in your new home for decades, or might you move within 10 years? This can affect whether a fixed-rate or an ARM is your best bet. Also, consider how your income might change over time and if you'll want to make extra payments to pay off your mortgage faster.

Align your mortgage choice with your future financial goals to make the smartest decision possible.

The Bottom Line

Securing a mortgage loan is a massive step in the home buying process. Avoiding these common mistakes can save you time, money, and stress. Remember, it all starts with shopping around! By doing so, you'll be on your way to getting the best mortgage deal possible.

Need some recommendations on vetted mortgage lenders in the Savannah area? Contact me here, and I'll connect you with the best.