1. Shopping for a home without being pre-approved.
You can make your best deal if you go shopping for a house with a pre-approval letter from your mortgage company. That way you know exactly how much house you can buy, and you are in a better position to make an offer and have the seller take you seriously, especially if there are multiple offers on the table.
Pre-approval for a home loan is different from pre-qualification. Almost anyone can get a "pre-qualify" letter from a mortgage company. All that means is that the Loan Officer took down some information and will take down some more information in the future. The pre-approval process is much more thorough.
2. Choosing a home loan lender for the wrong reason (i.e., the lowest rate, recommended by your Realtor.)
People choose home loan lenders for all the wrong reasons. Getting a low home loan rate is important, but it's not the only consideration. Lenders may offer the lowest rate on a home loan but charge extra fees (loan fees, origination fees, copy fees) so that in the end you'll pay more for the home loan even though your rate may be lower. The only way to protect yourself is to wait for the Good-Faith Estimate (GFE) which should list all the closing costs. Compare the GFEs from a number of home loan lenders.
3. Using the seller's agent.
Sellers want to get the highest price possible; buyers want to pay the lowest price imaginable. A dual agent can't be fair to both the buyer and the seller.
4. Buying a home without professional advice.
Before you buy that home, check with the professionals. Check with your insurance agent to see if your insurance is going to increase, or whether or not the new home will be covered (e.g., your new home has a wooden roof but your insurance company no longer issues policies for homes with wooden roofs).
5. Not getting everything about your home loan in writing.
Get everything in writing. No matter what the Loan Officer tells you, ask him/her to confirm it in writing. Don't listen to the Realtor's guarantee: get it in writing. Don't believe someone when they tell you that your home loan rate is guaranteed. Get it in writing!
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