THE TEN MOST COMMON
HOME BUYER MISTAKES

Avoiding these mistakes will save you stress
and money when buying your next home.


Riding the Roller Coaster
Many home shoppers begin the process with no plan or buying
strategy. With thousands of houses on the market you can waste
countless hours looking at everything. This eventually leads to
the emotional roller coaster of "Open House Excitement": the
thrill of finding your dream home, only to be let down by the
financial reality that you cannot qualify to buy it.

Solution: Mortgage Planning and Pre-Approval
Mortgage planning, along with prior approval of your loan, will
make home buying a more positive experience. It will help you
target the right price range, style and size house to meet
everyone's needs. It also allows you to concentrate on the
important needs of your family, without the worry of loan
approval.


The Cookie Cutter Mortgage
Most buyers are led to an unfamiliar mortgage company that has
very limited loan options. This impersonal, one size fits all
approach, will leave you uninformed and often paying three times
the price of the house into the mortgage loan.

Solution: Understand You Have Many Choices
An independent mortgage broker should have dozens of different
loan options. Pre-planning your mortgage allows you to customize
the loan to fit your family's changing financial needs. This
will insure a cost-effective mortgage that maximizes the building
of equity in your home.


Forfeit The Estate
Most homebuyers who are stepping up to another home mistakenly
assume they must sell their existing house to qualify for their
new home. They forfeit the enormous future potential of keeping
ownership of that real estate for what normally is a small amount
of cash out at sale.

Solution: Long Term Planning
It is important to look at the investment potential of retaining
your existing house. Most people can qualify to own many pieces
of investment properties. Real estate can be one cornerstone of
your long-term retirement plan.


Putting The Cart Before The Horse
Getting emotionally attached to a house before you know if you
can qualify to buy it can lead to unnecessary disappointment and
embarrassment.

Solution: Loan Pre-Approval
Having your mortgage loan pre-approved before you start shopping
will let you know what size and price home you can afford. This
keeps you in control and will strengthen your position to
negotiate. Having prior approval will also spare you the
heartache and embarrassment of being rejected for the loan.


The White Picket Fence Syndrome
It is common to view a house only as a warm hearth, a place to
raise the family and make memories. This view excludes the
business side of owning real estate. Most people end up paying
much more in interest over the long-term than is necessary.

Solution: Mortgage Planning
You can design loan terms and a repayment plan that will
accelerate the payoff of the mortgage without adding to your
monthly payments. Viewing your house as a financial asset can
definitely enhance the feeling you will have about your new home.


Buying The Sizzle
It is common to be lured in by fancy finishes and fashion fads
that make the house appear to offer what you want. Many home
shoppers will overlook the importance of the structure of the
house, quality of mechanical systems, and the practicality of the
design.

Solution: Having The Home Inspected
I strongly recommend you get your own home inspector. Visit the
house in your jeans and go over in fine detail the entire house
with a knowledgeable builder or certified home inspector.


Buying It Hook, Line And Sinker
Many qualified home shoppers have been told they would not
qualify for a home, or that the standard 30-year mortgage is the
only loan they could get. Many home buyers accept the advice that
they must pay for private mortgage insurance because of a small
down payment. Many people believe that the "interest rate" has
the biggest effect on the cost of a mortgage.

Solution: Do Your Homework
Sit down with an independent mortgage advisor first. They can
design a home loan that will not necessitate costly private
mortgage insurance without increasing your down payment. A
mortgage broker who focuses on the buyer's interests will show
you strategies that combine the most appropriate loan product with the most favorable terms that you personally can quality for.


The Jungle Survival House Hunt
Many house hunters have the mistaken idea that they must rush to
outbid the other competing home shoppers before it is too late.
This will invariably lead to paying too much for the house.

Solution: Finding The Seller's Hot Button
Knowing what the seller needs out of the transaction can often
lead to a creative offer that gets your bid accepted. It is
always good to speak directly to the seller and create a win-win
proposal. Remember: The offer to purchase process is wide open
and most anything goes.


Weak Knees Negotiation
Many home shoppers do not understand the significance of the
realtor agency relationship. In most cases the realtor
represents the seller, not you the buyer. Not having direct
access to the seller and having to make a conditional offer can
weaken your buying proposal.

Solution: Guaranteed Mortgage Approval
Making a knowledgeable fair offer to buy and giving the seller a
guarantee that your loan will close will assure your offer gets
taken seriously and will strengthen your negotiating posture.


Not Seeing The Forest For The Trees
Home shoppers tend to get emotionally attached to a home before
they make the critical business and financial decisions. Buying
on emotion often means overpaying for the home and leads you into
the wrong mortgage costing you thousands of extra dollars. This
limited view restricts your ability to fit the mortgage into the
family's other changing financial needs.

Solution: Mortgage Planning And Critical Analysis
Go into the mortgage planning session early and go in with an
open mind. Explore the many loan options available to you. Your
home mortgage will likely be the biggest financial commitment you
will ever make. Critical analysis by you and your mortgage
advisor will enable you to determine which loan program is best
suited to meet your family's short and long term plans. Taking a
broad view of home ownership will make the whole process more
enjoyable and make your future more prosperous.


REMEMBER: Get informed, plan ahead, stay in control, and always
meet with your mortgage specialist before you shop for a home.


Paul Donohue is available to answer questions and counsel you
personally. He is, Your Mortgage Advisor for Life.

Phone: 800-753-7767
E-mail: theadvisor@yourmortgagematters.com.
Fax: 336-643-7762
Address: PO Box 780, Summerfield, NC 27358