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Deadly Mistake #1: Thinking that you cant afford to buy a home

Sadly, this is one mistake that too many people make. They will end up forever renting, when those monthly rental payments could be going towards building up their own equity.

Now, its easier than ever to afford a home. There are many loan packages available for all types of homebuyers, mortgage rates are more flexible than ever before, and tax laws make owning your own home quite attractive.

The tax advantages to owning your home can actually make it cheaper to own than to rent. The money you pay in mortgage interest (thousands of dollars a year) is tax deductible. Rent, on the other hand, is paid for with after-tax dollars and goes towards your landlords equity, not your own. That makes it worthwhile to stretch a little to afford a mortgage payment thats a little higher than your monthly rent.

Finally, while theres no guarantee that a specific home will increase in value, historically home prices have risen over time.

Deadly Mistake #2: Not having a plan

Buying a home is no small matter, and you must be prepared for all the decisions youll have to make. This is where professional advice can really make a difference in the kind of success youll have.

Its best to have a clear strategy as you go through the buying process. Your plan will keep you on track and help you avoid some of the headaches involved and the common mistakes people make. Buying a house can seem like a complicated process, but if you take it one step at a time, know what youre looking for, and have a specific plan, you can make the process much easier.

The first thing to do is to look at your current situation. What are your lifestyle needs? This includes not only how you use your current residence, but also what you want in a community or neighborhood, such as schools or theaters close by. When can you move out of your current residence? Whether you own or rent right now, timing your move is going to be an important part of buying a house.

Next, decide what you want in a home. Whats most important to you? Are you looking for a house with a fenced yard, a bigger kitchen, more bedrooms, a fireplace? Write down the specific features you want so you can recognize the home that meets your desires.

Where do you want to live? Do you want to be closer to work? If youre unfamiliar with the area, your real estate professional can tell you what the different neighborhoods have to offer. You may even want to take a day just to drive around neighborhoods and get the feel for them.

Let your real estate professional know what youre looking for, and which items on your wish list are optional. He or she can then save you time by only showing you homes that meet your criteria.

Deadly Mistake #3 Failing to select a REALTOR you can work with

Buying a home will likely representthe largest purchase you make in your life.Having a professional on your side will help ensure that you get the best deal possible. Also, the home buying process can be frustrating, even in the best of circumstances. Working with someone you feel comfortable with and who is knowledgeable will make the buying process a lot smoother for you.

You may need to interview several REALTORS before you find one who is right for you. Ask how he or she helps buyers find a home. You want someone with lots of experience in successfully closing transactions. This kind of person knows the ins and outs of negotiating, closing a deal quickly, and minimizing the headaches. Youll save a lot of time and trouble with an experienced agent. Make sure your agent has access to the Multiple Listing Service, or MLS, which lists the homes available in your area. This will help you find a home with the features you want.

The person you finally choose to work with will determine whether your homebuying experience is a pleasant one. Spend a little time in finding the right agent and the rest will go a lot easier.

Deadly Mistake #4 Failing to pre-qualify for a mortgage loan

How much can you afford for a home? The best way to know is to get prequalified for a loan. This will tell you what your buying power is, so you only spend time looking for homes in your price range.

These days, getting prequalified is simple. You call or visit a lender and answer some questions about your history. He can tell you about the kinds of loan programs available, and which might be best for you. The lender then runs a credit check and determines if you qualify for the loan amount you want.

Your next step is to actually get pre-approved for a loan. In this process, your paperwork is submitted to an underwriter. When you receive pre-approval, you are getting a loan commitment from the lender.

Now you can shop for a home with confidence, without worrying about whether youll qualify for a loan. The pre-approval also puts you in a better negotiating position, since you know you wont be turned down for the loan.

Deadly Mistake #5 Failing to understand the loan options available

There are numerous loan programs available, so you should not choose a loan based only on the interest rate.

Sit down with a lender who is willing to explain the different programs and help you determine which one is right for you. Each program will contain certain benefits that may or may not work for you. You may find that the program that fits your special needs isnt necessarily the one with the lowest interest rate.

Consider both the fixed rate loan and the adjustable rate mortgage. You may be able to save more money with the adjustable program, but the fixed rate program may have other features youll find more attractive on closer inspection. This is where a good lender can help you make a decision.

A good lender will also be able to offer a variety of programs that take into consideration how long you expect to stay in the home, your current income versus anticipated future income, and your current funds available. With so many choices offered, take the time to find the loan program thats right for you.

Deadly Mistake #6 Failing to get the home inspected by a qualified inspector

The seller is supposed to disclose any known problems with the home, but the seller may not know everything about the home, or may simply have forgotten some of the problems. Its best to have the home professionally inspected.

The home inspector knows what to look for in the structural and mechanical condition of the home, and will see things you might miss. For example, he or she can check the various systemsplumbing, gas, electrical, and heating. You might flick the light switches in a house to make sure they work, but the inspector can determine whether the wiring is up to code.

The professional home inspector will write up a report that indicates the homes condition. The written report should include a clear explanation of the problems and an estimate of repair expenses. Never accept an oral report, as that does not give you any bargaining power with the seller.

When you write the offer on the home, you can make it contingent on the outcome of one or more home inspections. Your lender may even require certain inspections, such as one for termites. Be sure to specify in the contract who will be responsible for any problems discovered during inspections.

A well-written home inspection report can help both you and the seller come to terms based on a clear understanding of the homes true condition. Your real estate professional should know your states laws regarding home inspections, and should be able to help you through this crucial part of the homebuying process.

Deadly Mistake #7 Failing to understand your rights and responsibilities

There is more to buying a home than finding the right house and getting the loan. Many laws concerning buying and selling a home have been created over the years to protect one party or the other. You need to understand how they affect your decision to purchase, and what responsibilities you must assume.

Your Purchase Contract is a legally binding document. It should be carefully written and reviewed so that both you and the seller understand clearly what each of you is responsible for.

However, if you have any questions or doubts, be sure to express them to your agent. Dont make any assumptions. For example, if there are any repairs to be made, be sure to spell out whether the seller will make them before closing, or if you will take care of them.

You may also need to make sure there are no defects in the title and find out whether the property is in conflict with local zoning restrictions. If the property cannot legally be sold as is, either you or the seller will have to remedy that.

A competent real estate professional will help you through the maze of laws involved in buying a home, and can help you understand the technical language in the contract, so that you are fully informed about your rights and responsibilities.