Mortgage Loan: 10 things to remember

Here are my top 10 suggestions for those who have never been through the home buying and financing maze:

1. Review your credit report. Don't start looking for a home until you're certain there are no credit problems or credit-reporting errors.

2. Have a lender preapprove you for a mortgage. You don't want to be prequalified; that just tells you how large a loan you might get if you ultimately pass all the lender's tests. Preapproval means you have passed those tests and are guaranteed a loan.

3. Consider carefully how much you can afford to spend. Just because a lender says you can qualify for a $300,000 mortgage does not mean you can comfortably make the payments, or that you necessarily want to do so. Leave some wiggle room by purchasing a home that is somewhat less costly than the most expensive house you could stretch the finances to buy.

4. Don't fall in love with a house. Love is blind; you want to look at houses with your eyes wide open. Otherwise, you may overlook serious flaws, or pay more than the house is worth.

5. Find a competent, reputable real estate broker. In addition to helping you to find a house, a good agent can steer you through a process that most first-time buyers find bewildering, at best. You may want to work with a buyer's agent, who specifically represents the buyer in the home purchase transaction. If not, recognize that the agent who shows you properties represents the sellers and, under the law, must protect their interests, not yours.

6. Have an attorney review the offer and the purchase and sale agreement. Both are legal documents; you need to understand them and make sure they contain all the protections you need before you sign them.

7. Don't skip the home inspection. The $300 or $400 you spend could save you thousands more, not to mention endless grief, by identifying problems. Remember, though, that no home is going to be perfect. You might want to renegotiate the price or ask the seller to make repairs.

8. Make sure you will be able to insure the home you purchase. This has become a major issue, as insurers are reluctant to cover homes with past claims for water-related damage. If you're not going to be able to insure a home, or insure it at reasonable cost, you probably don't want to buy it.

9. Shop as carefully for a mortgage as you shop for the home. You will find a seemingly endless array of financing options; understand all the terms and select the loan that is best for you.

10. Don't let anyone pressure you into buying a home or accepting a loan. It's better to regret having walked away from a deal than to regret having walked into it.