Thousands of mortgages are taken out each day, and thousands of the same mistakes are made by borrowers. These mistakes not only create problems for the mortgage holders, but it also costs them thousands of dollars. If you want to avoid the most common mortgage mistakes then you need to know what they are.

Mortgage Mistake # 1 – Not Utilizing First Time Home Buyer Programs

If you are a first time home buyer, you should take advantage of the hundreds of mortgage programs that are designed to make first time home ownership easier. These programs include low down payment mortgages, reduced interest rate programs, and down payment grant programs. Free mortgage education programs are also available for first time home buyers. Take advantage of these perks while you can, because you only have one shot at them.

Mortgage Mistake # 2 – Taking the First Loan That You See

Most first time home buyers don't realize how many mortgage products are available. They also aren't aware of how much interest rates and terms vary from lender to lender. In order to ensure that you get the best interest rates and the best loan product for your situation, it is very important that you shop around before you select a mortgage to use.

Mortgage Mistake # 3 – Having Eyes Bigger Than Your Stomach

Another very common mortgage mistake that people make is taking out too large of a mortgage for their budget. Most first time home buyers don't understand how much more expensive owning a home is compared to renting. In order to avoid making this mistake you should learn about all of the expenses that are related to home ownership including mortgage payments, property taxes, home owner insurance, maintenance bills, garbage bills, water bills, higher electricity bills, etc.

Mortgage Mistake # 4 – Not Setting Enough Money Aside to Pay for Closing Costs

As a first time home buyer you may not be aware of all of the closing costs that you will need to pay for. Your lender should provide you with a good faith estimate of your closing costs, but this estimate is usually going to be low. It is a good idea to make your own estimates based on the home owner's insurance quotes that you get, the estimated property tax amount, and other fees that you become aware of as you get closer to the closing date. A week or two before closing you may want to contact your lender for an updated estimate of your closing costs.

Mortgage Mistake # 5 – Not Setting Enough Money Aside for Moving In Expenses

While most people save money for closing and down payments, few first time home buyers think about putting money aside for costs associated with moving in to their new home. As a new resident in a neighborhood you will need to pay for utility hookups, home owner association fees, repair fees, moving costs, food and staples for your pantry, window dressings, and furniture. It is amazing how quickly the cost of small repairs like patching holes, painting, and cleaning the carpets can add up. Make sure that you put aside at least $500 for move-in expenses to get your house set up properly.