Sandusky County foreclosures rise 202 percent -- could it happen to you?

Northwest Ohio renters thinking of making the leap to home ownership may want to heed idiomatic advice and look first.

The Toledo Blade today reported that local foreclosures sky-rocketed in 2006. Citing RealtyTrac figures, the Blade revealed that Sandusky County's homeowners fared the worst among area residents trying to hang onto their houses. The county's 2006 foreclosure rates jumped 202 percent from 2005.

Foreclosure rates in the same period also were up in Lucas County by 59 percent, and in Wood County, by 45 percent. Statewide, foreclosures rose 64 percent.

In simple terms, foreclosures happen because homeowners cannot pay their mortgages. And in Ohio's soft real estate market, even homeowners who attempt to sell -- sometimes at dramatically reduced prices -- before foreclosures befall them are having little luck.

The market, then, looks primed for buyers: Reduced! No money down!

But beware. If foreclosure rates have climbed so high, could it happen to you?

The answer is yes.

One common mistake that can lead an inexperienced home buyer to foreclosure down the road is using a pre-qualification loan figure too liberally. Don't rely on your mortgage lender to tell you how much home you can afford; frequently these pre-qualification figures don't factor in the costs of insurance, taxes, maintenance and repair, and how these costs will affect your budget. Or, rather, the home buyer himself doesn't factor these costs into the loan figure.

Just because you're approved for, say, a $110,000 mortgage loan doesn't necessarily mean you should actually borrow $110,000. Your lender's pre-loan figures indicate the maximum amount you can reasonably be expected to pay back.

Paying the maximum amount you possibly can for something doesn't make much financial sense and it's one reason people get into financial trouble.

Think of it this way: If there are two gas stations in your neighborhood, and one is selling gas for $2.15 a gallon and the other is selling gas for $2.09 a gallon, it doesn't make any sense to pay the extra six cents per gallon just because you have that option. One might argue that the more expensive gas station sells a better cup of coffee, or has friendlier employees, but the fact remains that if you patronize that station, you will may more for gas than is necessary.

So, view your pre-qualification loan figures similarly and be conservative when shopping for a home. A full tank of gas is a one-time small purchase, but your mortgage is likely to be the biggest single payment you make every single month for the next 30 years.

For other tips and advice on home-buying and avoiding foreclosure, visit the U.S. Department of Housing and Development's website here.