Buying a home is undoubtedly the biggest financial decision most people ever make. At the same time, you are having to deal with moving, another potentially life altering decision. Getting caught up in the excitement of the moment is common, but it's serious business too – and you deserve serious advice. You don't know it but, in the next few minutes you're going to learn eight commonly made home buying mistakes. Avoiding these mistakes will save you thousands of dollars. It will also allow you to avoid the anguish of making a home purchasing mistake.

It is a lot harder to win a game, or any endeavor, without having a clear strategy, or game plan. With a game plan, you will eliminate many of the headaches involved in this complicated process. You need a clear plan when deciding to buy a house. Avoiding the other 7 mistakes by better planning will make your experience better from a number of perspectives.

The first step is to evaluate your current situation

If you currently own a home, will it be necessary to sell before making another purchase? Most people are frightened of putting their home on the market prior to knowing exactly where they'd be living next, but that's exactly what you must do.

Are you renting? If so, how much time is left on your lease? You'll need to review the consequences of breaking the lease if you don't want to or can't wait before buying. Specifics regarding the location of the house and the desired amenities (number of bedrooms, a pool, or garage size) should be decided on, too. Commute distance is yet another factor to consider.

Next, determine what feature are important to have

Write down desirable locations you would consider, an acceptable price range, the number of bedrooms and bathrooms, and any other amenities that are important to you. Be specific. Although you probably won't find a home that offers every feature on your list, without a wish list it will be harder to recognize a home that meets your expectations.

You might want to use the Home Buyer Checklist when you are out looking for your home. There are so many things to think about when choosing a home--sales price, neighborhood, distance to work, and other special features--that it is difficult to keep them all in your head.

Tell others, like your Realtor What's Important to You

It is a lot of work finding a new home. A competent Realtor will look for homes that match your criteria. Using a realtor will save you time and effort. You'll spend less time looking at homes that don't fit your needs and desires. Some things to watch out for:

• A home which is too large or too small for future needs
• A fixer-upper when you are not handy
• A house that is too far from work or too close to traffic
• A home in the wrong price range

Having a plan will save you time and reduce the hassle of shopping for a home. To summarize, spend a little time in up front and save a lot of time and money in the future!

Many people feel that home ownership is beyond their reach, but affording a home has never been easier. As you will realize after looking over this web site for a short time, home loan programs are more flexible today than ever, and the tax laws continue to favor home ownership like no other tax shelter.

Home ownership is an investment like no other. Although no one can say if a specific home or community will appreciate in value, generally speaking, the odds favor the homeowner.

Numerous unique tax advantages are available to home owners. The thousands of dollars you pay in mortgage interest is tax deductible. This tax deduction alone can sometimes make owning your own home cheaper than renting with "after tax" take home dollars.

We, at Lightning Mortgage, will be glad to show you in detail the tax savings numbers. We have a free report that we share with our clients after they apply. We will help you determine the best loan product to suit your specific needs.

Most people don't realize how much they can afford. Sometimes they spend hours searching for homes in a price range that is too high or too low! Save time and money by getting pre-qualified for a mortgage. Before you go shopping for a home, you must determine how much you can afford.

Once you are pre-qualified for a mortgage, you will know your buying power-you will save time by looking only in your price range. The process is simple. We'll ask you basic questions concerning your credit history, and determine your buying power.

You can even get pre-approved for a loan! Imagine for a moment that when you and your Realtor initially draft your offer for the home you select, you are already approved for the loan – IN ADVANCE. From the seller's perspective, it's as if you are an all-cash buyer! By having this step done you will relieve stress and worrying about qualifying.

In today's market, a pre-approval can be a powerful negotiating tool. The old way of buying a home caused people like you to spend many searching for the perfect home, carefully drafting an offer, awaiting acceptance of the offer, consulting a Loan Officer, and filling out the multitude of forms and applications. All the effort would often go to waste because, for whatever reason, you'd be turned down for the loan. You deserve peace of mind and negotiating power by getting an approved loan before you make an offer.

Get Pre-Qualified for a Loan using our Free On-Line Service

Most likely you don't rarely, if ever, interview people. Yet, in order to find both the lender and the right Realtor (you'll need both), you may need to interview several. The quality of your home buying experience is dependent upon your skill at selecting the best-qualified people.

In the real estate business, people who have helped buyers like you buy and finance many homes usually cost about the same as others who have less experience. Bringing that experience to bear on your home purchase could mean a lower price at the negotiating table, a faster close, better loan terms, as well as experiencing much less purchasing hassles. Your lender should understand how to find the right loan for your needs. Your agent should be a skilled, win-win negotiator!

You need to select people who guarantee their services. You should have the right to fire either the lender or the Realtor if you are not satisfied - no questions asked.

Both lenders and agents make it their business to provide expert service and advice through the entire process. The more closely you work with your lender and agent, the better your needs are known and the more effectively you can be served.

The purchase of your home could well be the most important financial transaction you have ever made. The people you select can make it a satisfying and profitable activity or a terrible experience. It's your home. It's your money. Never hesitate to ask questions.

One of the great modern-day myths is that a fixed rate mortgage (at today's rates) is the best mortgage type.

Many different types of loan programs are available. Refer to Our Loan Types. It would be a great mistake to think that just because "Aunt Sue got a 8.5% 30-year fixed rate" you should get the same loan.

You should get together with an expert who can explain the different types of loan programs. Each program may have its own series of special benefits for you and your specific needs. When considering such an important decision, it is best to explore all possibilities. It may well be that a 30-year fixed rate is the best type of loan program for you. It may also be that you can save a significant amount of money by exploring alternative loan programs.

A full-service lender like Lightning Mortgage with relationships throughout the mortgage industry is a must in today's market. Lenders need the flexibility of the small business owner with the clout of a large company.

Today there are almost as many different programs as there are housing options. A few considerations for choosing the right type of mortgage are:

• Anticipated time in the home
• Available asset base
• Current income situation vs. future income situation, etc.

It is wise to pick a loan program that fits YOUR lifestyle.

Example: If you pay off a loan in fifteen years versus thirty years, you will obviously save a lot of money in interest expense. It is important to note that this savings is because you repay the loan in half the time. The savings is not due to a significant savings in interest rates, but in interest paid.

You should expect that there would be a much lower interest rate since the loan has a quicker repayment and, from any lender's perspective, carries with it less risk. Yet the difference in interest rate will not be that significant. Rates on 15-year mortgages may be 1/4% to 3/8% better than 30-year mortgages. The other important consideration is that monthly payments on 15-year loans will be approximately 25% higher on a monthly basis.

Another one of the great modern-day myths is that you should go to your bank to get the best mortgage at the best interest rate.

Typically a commercial bank will own a separate business entity that shares the bank's name and offers mortgage financing. But, this does not mean that you will get a 'special' deal just because you are the bank's client. Each and every loan must stand on its own merits and meet loan program guidelines.

The bank's mortgage subsidiary has no special access to your financial records as you might expect. The bank's mortgage subsidiary must request your financial records from the bank just as any other mortgage company. Your mortgage loan process will not be simplified or viewed differently from any other applicant making a request.

The perception of most people who go to their bank's mortgage subsidiary is that their loan payments will always be made to their bank; thus, all of the individual's banking needs will be "under one roof." The reality is that most mortgage subsidiaries of banks sell their loans on the secondary mortgage market and may sell your loan servicing, just as any other mortgage company can.

Another important consideration is that a typical bank mortgage subsidiary works with a small number of mortgage products. You will seldom find a wide variety of loan programs, and your loan officer may not have a good comprehension of all the different programs available. It is doubtful that they can adequately advise you as to the best program for your needs. It is possible that you, or the property you are buying, may need to have special underwriting to approve your loan application.

Just as you should interview your Realtor, you should also interview your Lender. Not all lenders look after your needs. Select a Lender (we, of course, hope it will be Lightning Mortgage) who is willing to discuss your needs and help you choose the loan program that is best for your situation, not the best for the Lender!

You probably would not want to rely on the seller to point out defects in a house he is attempting to sell. There may even be hidden problems of which he is unaware.

Be sure your sales contract is worded so that any "earnest money deposit" must be returned in the event the house fails inspection. If a major defect is found, you have the option to cancel the contract and have your deposit returned, bargain for a lower price to compensate for the cost of repairing the problem, or have the owner make needed repairs before the sale closes.

Even before you get to the point of a contract and having a professional inspector look at the house, there are many items you can check yourself as you are shopping for a home:

• Structure: Basement, check the foundation for cracks or water marks. Floors, are they level? Does the roof sag?
• Water damage: Look for unevenly painted ceiling or wall; mildew odor in basement; signs of re-plastering or re-tiling in just one area of a room.
• Water pressure: Flush toilet and turn on both hot- and cold-water faucet at the same time to test.
• Plumbing: Ask what type pipes are installed and their age. If applicable, ask when the septic system was last inspected and cleaned. Stand near the tank to detect odor or soggy ground.
• Wiring: A 100-amp system is typical in modern construction and uses a one-inch main line; this can be seen leading to the fuse box. Appliances such as drier or range require a 220-amp line. Notice if lights flicker or don't work. Check for electrical outlets . . . usually at least 2 in each room.
• Energy efficiency: Ask to check last year's heating and cooling bills. Determine if proper insulation has been used.
• Pests: Be alert for small accumulations of sawdust in the basement. This might indicate an insect problem. Obtain date and results of the last wood-destroying pest inspection.
• Ask to see the seller's survey made when the seller bought the house. Make sure you read it.

Home Buyer Checklist

When you are shopping take a copies of the Home Buyer Checklist to keep you alert to possible problem areas. The web page will print in black and white for your convenience if you press the print button of your browser. Avoid "surprises" by keeping your eyes open. A good realtor will point them out to you. Be certain that you are clear on items that would be your responsibility to correct and repairs the seller is agreeing to make. Have this list with you when you go for your walk-through. You can be successful in the home buying process. During the entire process you should remember to buy with resale in mind. In short, be alert! Be curious!

A home inspector reports on the structural and mechanical condition of every major part of the home. With this report you will have the facts you need to make a decision about whether the condition of the home suits your needs.

A well-qualified inspector who has adhered to federal licensing standards can spot problems that you might not be able to see. Expect problems to be clearly explained, repair expenses closely calculated, maintenance costs estimated, and a written report delivered within a day or two.

Most contracts are written conditional on the outcome of several inspections. These inspections may include several items including inspection for wood-boring insects, excessive amounts of radon gas, structural soundness, and the condition of the heating, wiring, roofing and plumbing.

When the contract is written, it should specify who would be responsible for paying to correct problems that are uncovered by the results of any of these inspections.

If the purchase contract is well written, home inspections can create a safety valve for both the buyer and seller. If poorly written, the result can be heartbreak or lawsuits.

Your Realtor should be very familiar with the local laws and customs regarding home inspections. Many people have made costly mistakes about purchases because their agent failed to comprehend this crucial report.

Real estate law is extensive and complex. The contract for sale and purchase is a legally binding document. An improperly written contract can cause the sale to fall through or cost you thousands of dollars for repairs, inspections, and remedies for title defects.

You must be certain which repairs and closing costs are your responsibility. You must know whether the property can legally be sold "as is" and how deed restrictions and local zoning will affect the transaction. If there are defects in the title, or if the property is in conflict with local restrictions, you or your Realtor must remedy them. Otherwise, you could lose thousands!

It is your Realtor's job to know the laws governing real estate transactions. They are involved in an on-going training program to keep up to date with these laws.

You deserve to have an agent who is not only knowledgeable about the transaction but is also willing to educate you throughout the process so you will feel more comfortable.

To turn the negative around, here's what you should do:

• Don't buy a home on a whim. Have a plan.
• Learn about the tax benefits of home ownership, giving you greater buying power.
• Get pre-approved for a mortgage with a great lender like Lightning Mortgage.
• Find a good realtor to help you, guide you, and protect you.
• Look at all your mortgage options and pick the best one for your situation, not simply the safest (and most costly) one: the 30-year fixed mortgage.
• Use the attached Checklist to help you make the best decision of which home to buy.
• Obtain a home inspection by a licensed inspector.
• Know your rights as a home buyer.

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• Explore the rest of the Loan Process
• Explore Credit Score Topics
• Learn about Loan Types
• Determine if you want to be pre-qualified or pre-approved
• Review The Top 10 Factors That Influence Your Mortgage
• Learn about the Tax Advantages of Home Ownership
• Submit A Loan Application