Trial and error is a common way to learn, but when it comes to home financing, that process can be a costly one. The American Dream of homeownership is alive and well in America, and millions of consumers have decided to act now in order to take advantage of the lowest mortgage rates in history and a surplus of inventory at discounted prices. Individuals who realize that buying a home now is a smart decision need to make sure to look before they leap in order to avoid some of the most common mortgage mistakes.

For most consumers, a home purchase represents the largest financial commitment of their lifetime. Taking the preventative measures to ensure getting the mortgage process right the first time is a vital step as by selecting both the right type of mortgage and choosing a home that will meet your long-term goals can increase the odds of properly managing monthly payments and avoiding mortgage default altogether.

Taboo Mortgage Moves

The mortgage industry is laden with a variety of products and novice borrowers who need to conduct their due diligence to ensure that a wise option is selected. Some common mortgage mistakes that should be avoided at all costs include:

• Skipping the Down Payment: Recently 47 percent of all participants noted that if they were able to bank a down payment they would switch from renter to buyer (Trulia.com). That logic is backed by the fact that not only will a down payment immediately provide a bit of home equity, the investment can make it easier to score a great mortgage, (lenders favor borrowers willing to put their own money into the game) and can save on additional expenses such as having to purchase private mortgage insurance.
• Choosing an Adjustable Rate Mortgage (ARM): For decades, financial experts have long touted that those who could not qualify for a fixed rate mortgage should skip buying a home for the immediate time as these types of home loans are the ones that provide for a stress free investment as there are no surprises. While on the surface, an ARM may seem appealing as they can indeed allow a consumer to buy more home than they can actually afford, the loans have fluctuating interest rates. Market conditions increase the odds of a homeowner ending up underwater and getting saddled with a hard to meet balloon payment upon the conclusion of loan terms.
• 40-Year Mortgages: While the most popular mortgage types are either 15-year or 30-year loans, 40-year mortgages are readily available. While they may indeed provide a good option for consumers who plan on buying one home and staying put for a lifetime. The reality is, the longer the loan amortization term, the more it will cost a consumer in the long run and add years into the building equity process.

Smart Mortgage Moves

Potential homebuyers need to cautiously enter the mortgage market to mitigate the risks of financial woes or foreclosure. Some tips to help include:

• Opt for a Straightforward Mortgage: The best long-term strategy for any potential homebuyer are traditional mortgages with straightforward terms and fixed rates.
• Credit History: The amount of money a consumer will be charged for the privilege of home financing fluctuates based on credit history and credit scores. The lowest interest rates are reserved for those deemed as low risk borrowers.
• Do The Math: Determining your budget is the first step towards becoming a responsible homeowner and crunching the numbers on a mortgage qualification calculator can show if you are poised to take on the financial burden.
• Think Long Term: The real estate market is not set in stone and those who are braced to ride out downturns will have a better chance of surviving financial turmoil.

How to Find Best Mortgage Rates

Comparison-shopping is an important step of any purchasing decision, and comparing mortgage rates, apples to apples is the only way to find the best loan offer based on your financial scenario. Mortgage Marvel is the industry's leading mortgage rate origination and comparison tool providing accurate mortgage quotes and fees in real time without requiring any personal information.