The Top 5 Mortgage Mistakes to Avoid


Buying a home can be an exciting and rewarding experience, but it can also be a daunting and overwhelming process, especially for first-time homebuyers.

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Mortgages are a significant financial commitment, and making mistakes during the process can have serious consequences. In this blog post, we'll explore the top 5 mortgage mistakes to avoid.

1. Failing to Check and Improve Your

Credit Score

Your credit score plays a significant role in determining your eligibility for a mortgage and the interest rate you'll receive. Many first-time homebuyers make the mistake of failing to check their credit score or not taking steps to improve it before applying for a mortgage.

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To avoid this mistake, check your credit score and take steps to improve it if necessary. This may include paying off outstanding debts, making on-time payments, and disputing any errors on your credit report. A higher credit score can lead to a lower interest rate and a more favorable mortgage offer.

2. Ignoring

Closing Costs

Another common mistake is ignoring closing costs. Many first-time homebuyers are unaware of the various fees associated with closing a mortgage, such as attorney fees, title search fees, and appraisal fees. These costs can add up quickly and significantly impact the total cost of the mortgage.

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To avoid this mistake, research the average closing costs in your area and budget accordingly. Be sure to factor in these costs when considering the overall cost of the home.

2. Ignoring Closing Costs

Another common mistake is ignoring closing costs. Many first-time homebuyers are unaware of the various fees associated with closing a mortgage, such as attorney fees, title search fees, and appraisal fees. These costs can add up quickly and significantly impact the total cost of the mortgage.

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To avoid this mistake, research the average closing costs in your area and budget accordingly. Be sure to factor in these costs when considering the overall cost of the home.

3. Not Getting Pre-Approved

Getting pre-approved for a mortgage is an essential step in the home buying process. Pre-approval gives you a clear idea of how much you can afford to spend on a home and helps you avoid the disappointment of falling in love with a home you can't afford.

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To avoid this mistake, get pre-approved for a mortgage before you start shopping for a home. This will help you narrow down your search to homes that are within your budget and prevent you from wasting time on homes that are out of reach.

4. Taking on Too Much Debt

Taking on too much debt before or during the mortgage process can have serious consequences. Lenders look at your debt-to-income ratio when determining your eligibility for a mortgage. If you have too much debt, you may not qualify for a mortgage or may be offered a higher interest rate.

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To avoid this mistake, avoid taking on new debt before or during the mortgage process. This includes opening new credit cards, taking out a car loan, or making large purchases on existing credit cards.

4. Taking on Too

Much Debt

Taking on too much debt before or during the mortgage process can have serious consequences. Lenders look at your debt-to-income ratio when determining your eligibility for a mortgage. If you have too much debt, you may not qualify for a mortgage or may be offered a higher interest rate.

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To avoid this mistake, avoid taking on new debt before or during the mortgage process. This includes opening new credit cards, taking out a car loan, or making large purchases on existing credit cards.

5. Choosing the Wrong Mortgage

Choosing the wrong mortgage can be a costly mistake. There are various types of mortgages available, and each has its pros and cons. Choosing the wrong mortgage can lead to higher interest rates, higher monthly payments, and a more significant financial burden in the long run.

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To avoid this mistake, research the different types of mortgages available and choose the one that best fits your financial situation and goals. Don't be afraid to ask your lender questions and seek advice from a financial advisor.

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Houston Real Estate Shake-Up: Arbor Realty Forecloses on Multifamily!

Arbor Realty Forecloses on Another Houston Multifamily Property!

June 20, 20242 min read

Arbor Realty Forecloses on Another Houston Multifamily Property!

Arbor Realty, a prominent New York-based lender, is foreclosing on yet another multifamily property in Houston. This time, the focus is on Northbrooke Apartments, located at 17111 Hafer Road. This significant move follows a default by Northbrooke SPE on a $32.5 million loan issued in February 2022. Harris County records indicate that Northbrooke SPE, associated with Mudra Investments and managed by Raxit and Rahul Patel, failed to meet its loan obligations, which amounted to $135,400 per unit.

Details of the Foreclosure

The foreclosure auction for Northbrooke Apartments is scheduled for July 2. This Class B property boasts 240 units and spans 240,000 square feet. Amenities include a pool and a fitness center, enhancing its appeal. Built in 2002 and remodeled in 2017, Northbrooke Apartments was valued at $24 million in 2024, according to appraisal district records. Mudra Investments acquired the property in 2022 from A. Khan Investment Properties. However, the owner has faced significant financial challenges, with seven liens totaling over $270,000 for unpaid work at the property.

Broader Implications and Trends

This foreclosure is not an isolated incident. In May, Arbor Realty moved to foreclose on Park North, a 372-unit multifamily property in Houston. The owner, an affiliate of Inman Equities, defaulted on a $56.3 million mortgage. Additionally, Arbor pursued foreclosure on a 13-story office building at 41 Marietta Street in downtown Atlanta, claiming that developers Kenny Wolfe and Bluelofts defaulted on a $20 million mortgage.

The July 2 foreclosure auction in Harris County could also determine the fate of 1001 West Loop South, an office building owned by Ali Choudhri in the Galleria area. Choudhri has been resisting foreclosure attempts for over a year.

Rising Commercial Foreclosures

These cases highlight a troubling trend in the commercial real estate market. Investors who acquired properties during the pandemic are now struggling to pay their mortgages due to rising interest rates. This has led to an increase in commercial foreclosures, with Texas ranking third for commercial foreclosures earlier this year, according to Attom Data Solutions.

Conclusion

Arbor Realty's foreclosure on Northbrooke Apartments underscores the financial strain many commercial real estate investors are currently facing. As interest rates continue to rise, more properties may come under threat of foreclosure, reshaping the landscape of commercial real estate investment.

Should you need an experienced Commercial Real Estate Mortgage Broker, please feel free to contact me at 281-222-0433.

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© 2023-2024 Bill Rapp, Medallion Funds LLC, Director of Capital Advisory


Houston multifamily propertyarbor realtyforeclosureNorthbrooke ApartmentsMudra Investmentscommercial real estateHarris County foreclosure auctioncommercial foreclosures in Texasrising interest rates
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This is not an offer to enter into an agreement. Not all customers will qualify. Information, rates and programs are subject to change without notice. All products are subject to credit and property approval. Other restrictions and limitations may apply. Copyright © 2021 | Medallion Funds


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Corporate NMLS NMLS # 1825831 | Company Website: https://medallionfunds.com/bill-rapp/

Copyright ©2021 | Mortgage Viking Team Licensed to Do Business | NMLS # 228246

This is not an offer to enter into an agreement. Not all customers will qualify. Information, rates and programs are subject to change without notice. All products are subject to credit and property approval. Other restrictions and limitations may apply

Corporate | NMLS ID NMLS # 1825831

Corporate Address : 11920 Southern Highlands Parkway, Suite 302, Las Vegas, NV 89141 https://medallionfunds.com/bill-rapp/