10 mistakes buyers make | Part 2: Choosing the right house

10. Price mistakes

By Rona Fischman
September 12, 2008

Although it seems obvious that you shouldn't spend too much for your home, many buyers get coaxed into making that mistake. Stop and think again, if these thoughts are crossing your mind.

Getting overwhelmed

The price of a home transaction is so large that the sums don't seem real. If you are spending $500,000, another $5,000 on your loan doesn't seem like much, right?

At 6.125 percent interest, that's about $30 a month. While that doesn't seem like much, but that $30 becomes $10,800 over the life of the loan. When would you consider nearly $11,000 to be an insignificant sum? Keep doing the math to stay grounded in the real costs of your decisions.

Failure to calculate before making an offer

Most of the things we buy have a set price; real estate doesn't. Don't lose track of your monthly payment costs as your offers rise during negotiation. (See Mistake 1 for more information ... )