Plano Mortgage, Plano Home LoansFor many of us, our home is the biggest asset we’ll ever own. But most of us don’t know very much about homebuying, and that can hurt us. Here are a few blunders to avoid:

Thinking of your home as a guaranteed good investment.

Buy it because you like it and need a place to live, but know that real estate markets can be fickle, especially in the short run. According to Yale economist Robert Shiller, between 1890 and 1990, home prices adjusted for inflation were virtually unchanged. In general, homes are not the best path for an investment or to wealth.  A home IS a place to build and live a life.

Focusing on the cost of the home more than the cost of the loan.

Mortgages are huge purchases of money and their terms can vary widely. Be smart about which kind of Plano Home Loan serves you best (fixed-rate or Plano Mortgage, Plano Home Loanadjustable-rate, 10, 15, 20, or 30 years, etc.).  Consider lender and title fees ~ what does it cost to obtain the rate you desire?  Ask your lender to provide a Loan Summary to compare a rate(s) that does have points and fees versus one that does not.  Compare your total out-of-pocket costs and the monthly payment.  Remember, the lower the rate, the higher the costs.  How many months does it take to see the advantage of the higher out-of-pocket/lower rate?

Buying more house than you can afford.

Sure, a bigger home may be appealing. But will each mortgage payment be a struggle?  What you can “afford” is subjective and dependent on your point of view and definitely the point of the Plano mortgage lender.  With the passage of the Dodd-Frank Act, today, all lenders are required to determine your Ability-To-Repay (ATR).   Click here to review the Consumer Protection Finance Bureau – What the new Ability-to-Repay Rule Means For Consumers.  Always get pre-approved for a home mortgage before shopping and focus on what you can afford.  The key to a successful home search and home loan is education.  Consider taking a Home Buyer Education courses that is offered through the US Department of Housing and Urban Development (HUD).  Click here for a HUD Approved Housing Counseling Agency that can provide advice on buying a home.

Being too fussy in your home selection process.

Don’t rule out various types of homes without checking them out and truly considering them. Don’t let an outdated bathroom, shag rug, or paint color put you off, as those can be changed. A home’s location does matter, though, as does its layout and room sizes.

Plano Mortgage, Plano Home LoansAvoiding real estate agents.

Ok, this MIGHT be true if you are an experienced home seller and you understand the current real estate market, understand real estate sales contracts, understand the legal ramifications of disclosure when selling a home.  Yes, you might save a few thousand dollars by going it alone – but a skilled and experienced agent can advise and guide you toward properties that “fit” your wish-list. As a buyer, you do not pay a fee to use a buyers agent.  As part of a listing agreement, the seller is paying a commission to the listing AND buyers agent to “sell” their home.  Do you really think a seller is going to lower his price to sell a home without real estate agents?  Quality agents are invaluable when making one of the largest decisions of your life.

Parts of this article from Fool’s School.


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