If you are a first-time home buyer....

Top Ten Mistakes that First Time Homebuyers Make

Your Buyer's Agent can help you avoid some of these mistakes. Ask questions, tell him or her what you want and what you have been pre-qualified for. Ask him or her to show you all homes you think you might like. And if your banker or other professional is not providing you with the financial information you need, ask your agent to give you names of others.

1. Timing Problems.

Not planning the move to coincide with the end of their lease can create family budget problems if you must still pay for your apartment after you have purchased your home. Check with your landlord about an early release clause from your lease if you are considering buying a home.

2. Looking at Homes You Can't Afford.

Get pre-qualified with a lender first and then stick within your budget. The amount for which you qualify is what your real estate agent uses as a guide to select homes for you to view. Also, if you begin viewing houses that are more expensive than you can afford, you may be disappointed in the homes that are in your price range.

3. Buying the Wrong-Sized Home.

Take time to plan how long you anticipate living in the property and try to envision what lifestyle changes could happen during that time.

4. Buying in a Neighborhood You Know Nothing About.

Do your homework. Find out about the schools, shopping, parks, or other amenities. Think about whether this neighborhood will make you as happy as the house does.

5. Operating on a First-House-Is-Best Theory.

Look at different types of homes in your price range--new homes, older homes, etc. Becoming familiar with the spectrum of what is available will help you become more objective about your home purchase, especially if you are coming from a renting situation.

6. Buying a Property That Is Difficult to Re-sell.

Most first-time home buyers sell within five to seven years. Consider the negatives to the property you are considering buying. Think ahead to how you would sell your home before you buy it.

7. Overextending Your Budget.

Just because you a pre-qualified for a certain amount doesn't mean that you need to spend that much on a home. Avoid feeling pinched. Analyze your comfort zone for payments. If you don't know what that is, write down everything that you spend for two months in order to give yourself a real picture of what you spend. Then plan for emergencies, vacations, savings, and upkeep of your new home. You'll have a much better idea of what kind of payments you can really afford.

8. Being Indecisive.

Take the time you need, but don't be afraid to make a commitment if you've found your dream home. Everyone gets cold feet at some time during the process, but don't miss out on that "good deal" because someone else bought the house while you were still thinking about it.

9. Choosing the Wrong Mortgage.

A thirty-year fixed rate is not the only or necessarily the best answer. Have your lender show you on paper how much each program will cost you and how they compare with one another. Request a "Good Faith Estimate" for each type of loan so you can compare upfront and monthly costs.

10. Under-Insuring the Property.

Forgetting to increase insurance coverage as the home appreciates in value or neglecting to properly insure the replacement value of the contents.
(Adapted from "100 Questions Every First Time Home Buyer Should Ask," by Ilyce R. Glink)