Buying a home is one of the biggest financial decisions you’ll ever make, but let’s be honest: it can feel like stepping into a maze with no map. When I started my journey, I didn’t know what I didn’t know, and I’m willing to bet that’s where many of you are too. The good news? You’re not alone, and with a little direction, you can avoid some of the biggest pitfalls and feel completely confident in your decisions.

Here are the top five things I wish someone had told me before I started the mortgage process.

1. Know Your Budget Before Talking to Anyone

It’s tempting to jump straight into the exciting part—like scrolling through real estate listings or meeting with lenders—but trust me, the very first step should always be understanding your own budget.

Why? Because no one knows your financial situation better than you. Start by calculating your monthly income and expenses. Figure out how much you can comfortably set aside for a mortgage payment without sacrificing your other financial goals. Remember, just because a lender approves you for a higher amount doesn’t mean you should spend it all.  It’s in the lenders best interest to loan you as much money as they possibly can, they get more interest like that.

Quick Tip: Check your credit score early. A higher score can mean lower interest rates, which will save you thousands over the life of your loan.

2. Understand PMI (and How to Avoid It)

Private Mortgage Insurance (PMI) is one of those sneaky costs that can add up fast. If your down payment is less than 20%, most lenders will require PMI, which protects them, not you, in case you default on the loan.

While not everyone can afford a 20% down payment, it’s worth considering how much you’ll save in the long run by avoiding PMI. For example, putting down a little extra upfront can save you hundreds of dollars a month—and potentially thousands over the life of your loan.

Quick Tip: Use tools (like our Homewise Mortgage Tool) to calculate how a larger down payment impacts your monthly costs.

3. Preapproval Isn’t the Same as Prequalification

These terms might sound interchangeable, but they’re not. Prequalification is an informal estimate of how much you might be able to borrow, while preapproval is a more detailed process that involves verifying your income, credit, and financial history. In short, preapproval carries much more weight.

Getting preapproved not only gives you a clear picture of what you can afford, but it also shows sellers that you’re serious and ready to make an offer.  In fact if there are other offers on the home you’re trying to purchase, a preapproval might even tip the odds in your favor because they Seller knows you are getting financed.

Quick Tip: Gather all your documents (pay stubs, tax returns, bank statements) ahead of time to streamline the preapproval process.

4. Fixed-Rate vs. Adjustable-Rate Mortgages

Here’s a quick breakdown of two common mortgage types:

Fixed-Rate Mortgage: Your interest rate stays the same for the life of the loan. This option is great for people who value stability and predictability.

Adjustable-Rate Mortgage (ARM): Your interest rate starts lower but can fluctuate after an initial fixed period. This can be a good choice if you’re planning to sell or refinance before the rate adjusts.

Knowing which option fits your long-term plans can save you from unnecessary stress (and costs) down the road.

5. Don’t Let Anyone Pressure You

Buying a home is emotional, and some people (yes, even professionals) might use that to pressure you into decisions that aren’t in your best interest. Whether it’s rushing into an offer or agreeing to terms you’re not comfortable with, always remember: this is your journey.

Take your time, ask questions, and don’t be afraid to say no. It’s okay to walk away if something doesn’t feel right—there will always be another house.

Quick Tip: If you ever feel overwhelmed, take a step back and revisit your budget and goals. Clarity is your best defense against pressure tactics.

The mortgage process doesn’t have to be overwhelming. With the right tools and a little preparation, you can navigate the mortgage process like a pro and make decisions to set you up for long-term success.

If you’re ready to take the next step or still trying to make sense of it all, sign up for our email list to get access to free tools like our Mortgage Preapproval Checklist and other resources designed to help you on your financial journey. Because when you’re informed, you’re empowered—and that’s the Sovereign Financial way.