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July, 2001 Newsletter

+++++++++++ July 6, 2001 +++++++++++++++++++

Introduction: New and Resale Home Sales Increase
Mortgage Rate Update: Rate Stability
Recent Site Updates: Tips For Single Homebuyers
This Month's Tip: Buying For Your Needs
Introduction: Sales Increase

Sales of both new homes and resale homes increased
last month, somewhat of a surprise to most analysts.
The strength of home sales has been one bright spot
in the overall economic picture, giving hope that
there will be a relatively quick turnaround. Much
of this buying activity can be traced to a reasonably
stable mortgage interest rate environment, detailed
in the following story.

Mortgage Rate Update: Rate Stability

Mortgage rates continued on an even keel in late
June, maintaining the narrow range of variance
that has been in place since early April. Mortgage
company Freddie Mac reported that average rates for
30-year fixed mortgages were 7.11% for the week ending
June 28, 2001, unchanged from the prior week. Charges
for points continued to average 1.0 for the same

This stability works to the advantage of the buyer,
since they can spend more time concentrating on
their home purchase and less time focusing on
possible rate increases or decreases.

For more information on mortgages, visit the Mortgage
Section at:
Mortgage Information

Recent Site Updates:
Tips For Single Homebuyers
Although the vast majority of homebuying information
available on the site will apply to both single buyers
as well as couples and families, there are some special
issues faced by those buying a home on their own. See
the new article on tips for single homebuyers at:
Single Homebuyer Tips
You can always keep up-to-date on what is new on the
Homebuyer's Information Center at the Site Update page:
Site Updates


LendingTree Mortgages
LendingTree Mortgage In this volatile financial and interest rate
environment getting as many loan comparisons as
possible is crucial. At LendingTree you can submit
one simple loan request form and within a few business days
get up to 4 bona-fide offers from lenders competing for your business.
Get more information here.


This Month's Tip: Buying For Your Needs

One of the most common--and potentially expensive--
mistakes made by homebuyers is misconsruing their
needs when buying a home. This can be an over-estimation
of their needs or an under-estimation, either of which
can quickly become a drag on their home ownership

A Real Estate purchase is not like buying a shirt where
the wrong size or style can easily be returned for the
right one. Property transactions are usually long and
somewhat involved and always carry a cost to the seller.
If you purchase the wrong house--one that does not fit
with your basic needs--and want or need to sell
it in a short amount of time, you'll lose money even if
you sell at (or even a bit above) the original purchase price.
So, getting the right "fit" for your needs is extremely

Analyzing Your Needs

We've got a whole section on the site that is devoted to
comparison of needs and wants, but suffice it to say that
just because you WANT certain features in a home does not
mean that you NEED them. There is a fairly distinct line
between a need and a want that frequently becomes blurred
when a buyer assesses what they desire in a home. Too often
buyers insist that they "need" something--whether it is
size or style or amenity--when in reality they only "want"
or would like to have it. Missing the distinction can get
very expensive since money is often poured into "wants"--
sometimes even at the expense of needs.

In general, a need is a necessity. For example, if you have
2 children you'll need a minimum of 2-3 bedrooms. If you do
not drive, you will need a home that has access to public
transportation. If you are physically challenged, you'll
need a home with specific adaptability.

A want, in contrast, is something completely different. It
is not a necessity, but rather, a desire. Examples would
be homes considerably larger than family size would
normally require or amenities such as jacuzzis, built-in
entertainment centers, vaulted ceilings or stainless steel
appliances. No matter how much the desire is, a want
will never become a need, no matter how often buyers describe
them as such.
See further discussion on the site at:
Comparing Needs and Wants

Typical Needs: Size

The size of the home is probably the very first need you
will want to focus on. Not only must the home be large
enough to accomodate you or your family, future needs should
also be factored in, depending on how long you intend to
live in the home. If you plan to stay in the house, for
example, for ten years, and know that your family size will
be increasing (or decreasing as older children move out) that
should be taken into consideration. Making a move before
you are ready will almost always be an expensive proposition.

It can be just as expensive (or more so) to buy more house
than you'll need. Not only will you need to deal with higher
initial costs and higher mortgage payments, you will confront
higher repair and maintenance costs on space you simply do
not need.

Typical Needs: Location

When assessing your needs, another important consideration
should be the location of the home. In the long run, proximity
to employment, schools and shopping will often take precedence
over the choice of the latest trendy (but less convenient)
neighborhood. The long commutes (especially since they
detract from time spent at home) will often turn out to be
a bad trade-off for moving to the currently popular
subdivision. Before you follow the herd to the latest
area, make sure that it makes sense for your lifestyle.

Typical Needs: Amenities

Depending on your personal situation, some amenities may
be necessities, others more optional. For example, your
work may require that you store tools and equipment at
home, making a garage an important consideration. Or,
you may have a home-based business where an office in the
home is requried. Those who have a child care business
may need specific areas that can be devoted to that business.

Mistaking Wants for Needs: Possible Consequences

We've seen a number of buyers confuse their "wish list"
(which are almost always WANTS) with what they truly
need in a home. We've watched buyers pursue a litany
of these wants--wood floors, stainless steel appliances,
lofts, etc. only to purchase a home that is completely
wrong for them--too small, in the wrong location or too
large--and need to move before they wanted to. The
concentration on what was wanted while overlooking what
was needed usually resulted in an unsatisfactory home
ownership experience. Plus, due to the expense of
all these extra items, the cost took a bigger bite out
of their monthly budget--for a home that made them less
than happy.

Summing Up

If necessary, you can live without a WANT, but it is
very difficult to live (and be happy in your home)
without a NEED. Save yourself some aggravation (and
most likely some money) by spending a little time
analyzing exactly what is important.

Next months topic: Changing Your Mind

As always, if you have suggestions for improving the
site, or topics you would like to see addressed in
this newsletter (or, if you have used the Home Buyer's
Information Center to successfully purchase a home),
access our feedback page at:
HomeBuyers Information Center Feedback

A special thanks to all those who have written to let us know
that they have found the Home Buyer's Information Center a
helpful resource in their buying process.
Have a great month and good luck in your home buying process!

The Team at the Home Buyer's Information Center

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