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What you need to know before getting a mortgage

Couple looking at a home from the sidewalk

Are you considering buying a home and getting a mortgage but feel like you have absolutely no idea what you’re doing? You’re not alone.

When my husband and I decided we were ready to become homeowners it felt like we were jumping off right into the deep end. We figured you scroll through the internet for listings of places, go see a few open houses, and maybe get connected with a realtor.

While those are solid starting points, there’s a lot more I wish I knew about getting a mortgage, the ugly stepchild of the homebuying process. No one taught me how to do this, but now after buying two houses and refinancing three times, I’m here to share what I’ve learned.

Here are the top 3 things I wish I knew before getting a mortgage:

Mortgage rates vary widely between lenders

I knew that rates could go up or down over time, but I didn’t know that rates could be so different between lenders. If you aren’t liking the rate and terms you’re getting from one lender, go to another lender to check what they’d offer you – you might find that they’re different – sometimes drastically so.

This difference exists because lenders have different business models and serve different borrowers. The only way to make sure you’re getting the best deal for your unique scenario is to shop around. You might end up with a great offer from the first lender you go to, but at least you’ll know you’re getting a fair deal if you have points of comparison.

Pro tip: You can get quotes without a hard credit check from some mortgage companies (like us!). Every time you get a hard credit check, your credit score can be negatively affected. Lenders will use this as a way to discourage you from shopping around, but you know better!

You're in control of your mortgage experience

So often when you’re buying a house or getting a new mortgage, it can feel like you’re in a time crunch. That’s because others (lenders, real estate agents, sellers, etc.) are making you feel that way. They want to close your deal so they can continue on with the next deal and make more money.

Lenders do this every day. You do this a few times throughout your life. Doesn’t seem fair that they get to assume you know everything from the start, huh?

Of course with lending, you will run into some time restrictions. Rates do change day by day because of how markets work. There are deadlines on buying a new home because there are so many people involved and ownership is transferred. But in many phases of the loan process, you can take the time to make sure you’re fully understanding what’s going on.

Ask questions. Demand answers. Make sure you comprehend exactly what’s going on and what they’re saying. Even if you’re the co-borrower. A mortgage is too big of a financial transaction to not understand what you’re getting into.

Don't get in your own way

When you’re going through the mortgage process, you’ll be asked for lots (and lots) of documents. Lenders will take a close look at your finances, and often request frequent updates (even more so since the start of the COVID-19 pandemic). Staying organized and keeping a close eye on your financial information will make this a lot less stressful.

I recommend creating digital copies of your files so whenever you’re asked to submit a form, it’s ready to attach and send. Making sure your co-borrower has access to these files also saves a step. Take an extra second to ensure you’re labeling these files accurately and clearly so you can search through them in the future (when you inevitably need them for filing taxes or refinancing again).

Make sure your finances are clean and avoid doing anything that will jeopardize your application – i.e. don’t go on a shopping spree in the middle of the mortgage approval process. Underwriters (the ones who analyze your documents and decide whether or not to grant you the loan) see everything and it could harm your chances of getting approved to close.

In addition to being a huge nuisance, this could also lead to you losing out on the rate you secured and having to go back to square one. Not a fun time.

The moral of the story is that being an informed and empowered borrower can lead you to an easier, more positive mortgage experience. Shop around for the best mortgage, ask questions, stay organized, and remember why you’re doing this at the end of the day: to enjoy your new home and put yourself in a better financial position.

Our Home Advisors are licensed mortgage experts and will walk you through every step of the process, from getting quotes to getting to the closing table. To get connected with your unbiased, expert Home Advisor, complete your questionnaire now.

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The information provided to you in Own Up blog is intended to be for general informational and educational purposes only and does not constitute legal or tax advice. This blog is not a substitute for obtaining legal or tax advice from a qualified professional. The views and opinions expressed on this blog are solely those of the authors and do not necessarily reflect the official policy or position of Own Up or describe Own Up's business model. Own Up makes no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the blog or the information, products, services, or related graphics contained on the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk.