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You might think that getting approved for a home mortgage loan is as simple as walking into your bank and walking out with a guarantee for the funds you need to purchase a home. But there’s a little more to it, especially since irresponsible mortgage lending practices played a major role in the recession and subsequent fallout. Although the housing market is finally showing signs of recovery (after nearly six years of recession), lenders are still exercising caution (understandably so) when it comes to their criteria for approving home mortgage loans. That said, there’s no reason the average person can’t qualify for a mortgage loan, especially with a clean credit history, a stable job, and sufficient funds for a down payment. But you’ll want to make sure that you’re getting the best possible arrangement for you, and that means avoiding a few common mistakes that many would-be homeowners, first-time or otherwise, are prone to make.

1. Comparison shop. As a consumer, you are constantly presented with a multitude of choices about how to spend your money. There is an entire aisle at the grocery store dedicated to cereal, and there are so many different car companies that auto malls can run for several blocks. So it’s truly surprising how few people comparison shop for mortgage loans. Most simply go their primary bank (where they hold accounts) and call it a day. But if you want to get the best rates and terms for your home loan, you really need to shop around.
2. Ask questions. One major mistake that prospective home buyers make is failing to ask questions pertaining to the loan process. For one thing, it is imperative that you ask about all the costs associated with the process, including a breakdown of all the fees. If you see a laundry list of fees on your paperwork, including items like administrative and ancillary fees, as well as document, title, and even photo reviews, you need to seriously question what your lender is up to. They should be able to explain any fees that are legit to your satisfaction. Otherwise, you might want to scope out other potential lenders.
3. Check rates and run numbers. The internet has made it easier than ever for people to take control of the mortgage lending process. And it’s in your best interest to do your homework beforehand so that you know the prime rate and you have a good idea of the mortgage rates other lenders are offering. In addition, you need to run numbers using a mortgage calculator (some will even add in associated costs like estimated property tax and insurance) to make sure that you have a number in mind for your overall loan and your monthly payments. When you run the numbers yourself you have the best chance of securing a loan that meets your needs.
4. Know your credit score. It’s incredible how many people walk into a bank to get a loan with absolutely no idea what their credit score looks like. Considering that you can order a free credit report from AnnualCreditReport.com, there’s no reason you should show up unprepared. And when you know that there are black marks dragging your credit rating down, you can clean them up before you head to your bank in search of a mortgage loan. When you have top tier credit you can more easily negotiate the best rates and terms.
5. Haggle. There aren’t too many venues where you can haggle in everyday life; if you try to negotiate the price for a sweater at The Gap they’ll probably throw you out. But when it comes to home loans, you should know that you can not only haggle, but it’s your duty to do so. If you fail to negotiate for lower rates and better terms, you have no one to blame but yourself when you don’t get the loan you want.