Avoiding Mortgage Mistakes

First-time home buyers often make mortgage mistakes they do not anticipate at the time they take their loan. For example, most are on the lookout for high interest rates or closing costs. The mistakes first-time home buyers make are often more complicated than cost considerations alone.

Budget Mishaps

Many first-time home buyers think of a budget in terms of the listing price of the home. In reality, the cost of a home is not the ticket price but the mortgage payment each month. Remember that a difference of $10,000 on a home's sale price can amount to very little each month, so do not get hung up on this small sum in negotiations.

Missed Opportunities

Along the same lines, purchase price is not the only area to negotiate a sale. Look into mortgage point buy downs, getting closing costs covered or even negotiating for a year's worth of homeowner's association fees as part of a sale.

Snap Judgments

There are some words many think of as red flags in lending; subprime and adjustable rate are good examples. Not all subprime loans are bad. For example, if you plan on staying in the home for just three years, a rate that does not adjust for five will not affect you. Do not be scared away by a phrase alone.