5 Mistakes to Avoid When Applying for a Home Mortgage

Here are five tips from GoBankingRates.com. 

1.Don't  confuse  prequalification  with  preapproval.
Getting  prequalified  means  the  lender  makes  a "guesstimate" of how large a loan the potential home buyer may qualify for. By contrast, preapproval means the lender has examined credit reports, incomes and other assets to determine how much the borrowers can afford. 

2.Avoid  making  major  changes  to  your  credit  behavior leading  up  to  the  time  you  plan  to  apply  for  a mortgage. Applying for new credit, such as an auto loan or credit card, can skew your credit score. Infact, CreditCards.com says how much money you owe to lenders is the second-most important factor in qualifying for a loan. It's nearly as important as paying your bills on time. 

3.Don't apply for a loan before personally checking your own credit history. Find out your credit score,tally  up  your  outstanding  debts  and  review  your  past  employment  history  before  meeting  with  a mortgage lender. 

4.Check  and  recheck  your  application  for  any  typos  or  "honest  mistakes"  that  may  cause  a  lender  to reject  your  application.  Any  misinformation  you  put  down  on  a  mortgage  application  can  be  readily verified in today's interconnected world.

5.You've probably heard this  100 times before, but don't  forget to read the  fine print. Hastily applyingfor a sub-par loan typically ends up being a waste of your time. 

How your credit score is determined:
35 percent - Your payment history
30 percent - How much of your available credit you use
15 percent - The length of your credit history
10 percent - The amount of new credit you've received
10 percent - The type of credit you've used 

Source: MyFICO.com