1. Don't buy if you can't stay put.

If you can't commit to remaining in one place for at least a few years, then owning is probably not for you, at least not yet. With the transaction costs of buying and selling a home, you may end up losing money if you sell any sooner.
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2. Start by shoring up your credit.

Since you most likely will need to get a mortgage to buy a house, you must make sure your credit history is as clean as possible. A few months before you start house hunting, get copies of your credit report. Make sure the facts are correct, and fix any problems you discover.
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3. Aim for a home you can really afford.

The rule of thumb is that you can buy housing that runs about two-and-one-half times your annual salary. But you'll do better to use one of many calculators available online to get a better handle on how your income, debts, and expenses affect what you can afford.
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4. Don't worry if you can't put down the usual down payment.

There are a variety of public and private lenders who, if you qualify, offer low-interest mortgages that require a down payment as small as 3 percent of the purchase price or No Money Down programs.
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5. Buy in a district with good schools.

In most areas, this advice applies even if you don't have school-age children. Reason: When it comes time to sell, you'll learn that strong school districts are a top priority for many home buyers, thus helping to boost property values.
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6. Get professional help.

Even though the Internet gives buyers unprecedented access to home listings, it's still a good idea to use an agent. Look for an exclusive buyer agent, if possible, who will have your interests at heart and can help you with strategies during the bidding process.
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7. Choose carefully between fixed and open interest rates.

Whether or not to choose an open or a fixed rate mortgage, has been debated for years. Though people feel strongly in both camps, simple mathematics can assist you in determining which mortgage is best for you and your personality. Your personality? Yes. Some people are not comfortable with any uncertainty in their lives. The idea of having an uncertain mortgage payment in the future may cause them more stress than the money they are saving is worth. Therefore, factor your own comfort level into the equation.
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8. Before house hunting, get pre-approved.

Getting pre-approved will you save yourself the grief of looking at houses you can't afford and put you in a better position to make a serious offer when you do find the right house. Not to be confused with pre-qualification, which is based on a cursory review of your finances, pre-approval from a lender is based on your actual income, debt and credit history.
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9. Do your homework before bidding.

Your opening bid should be based on the sales trend of similar homes in the neighborhood. So before making it, consider sales of similar homes in the last three months. If homes have recently sold at 5 percent less than the asking price, you should make a bid that's about eight to 10 percent lower than what the seller is asking.
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10. Hire a home inspector.

Sure, your lender will require a home appraisal anyway. But that's just the bank's way of determining whether the house is worth the price you've agreed to pay. Separately, you should hire your own home inspector, preferably an engineer with experience in doing home surveys in the area where you are buying. His or her job will be to point out potential problems that could require costly repairs down the road.
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Emotional Buyer Mistakes

Everyone makes mistakes, especially first-time home buyers. The trick is to learn from yours. And it is very helpful to learn about the mistakes other people commonly make. If you know where other folks have stumbled, you'll be on the lookout -- and you'll be able to avoid the same potholes.

 Here are the top five emotional mistakes that first-time home buyers often make.
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1. Falling in love with a house.

Buying a home is an incredibly emotional experience for many people, much more so than other financial investments. That's because we're choosing the place we're going to call home. It should be safe and secure, and in some way touch your emotional core. But because the process calls upon us to reconcile our dreams with the realities of our checkbooks, it also plays upon our emotions. And once emotions are involved, it's difficult to inject the distance you need to make an objective choice.

Can you fall in love with a house? Certainly. You may also be encouraged down that path by a real estate agent who says things like, "Oh, this house was meant for you." "It really suits you" and "I can tell this is the perfect house for you. Don't you just love it?"

You have to remember that love fades. After a while, you'll start to see the flaws every home has. Nothing's perfect, and if you haven't based your choice on what you actually need, you may find yourself owning the wrong home.
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2. Losing control of your purchase.

This can happen in a number of ways. You hire an assertive agent who puts you where he or she thinks you should be, which may or may not be where you actually want to live. Or perhaps your parents step in with a check and their two cents. Or your children require more of the time you set aside as home-buying time. Whichever way it happens, losing control of the home-buying process can result in a number of errors that can damage the end result.

For example, if you and your spouse or partner want to be in a particular school district in time for the fall semester and you let the spring slip away, you could wind up having to transfer your kids mid-semester.

Another way of losing control happens when you allow personality clashes (between you and the real estate agent, mortgage broker or professional home inspector) to get the best of you. Just remain focused on the goal: a successful closing and move into your new home.
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3. Being indecisive.

Do you want to buy a house? Or do you want to start your own business? Or do you want to take a six-month sabbatical and travel the world?

Buying a home means making plenty of tough decisions about budgets, neighborhoods and what you want in a house. Then you must reconcile your choices with those of your spouse or partner. If you're indecisive about what you want and where you want it, it may indicate that you're not ready to make the emotional commitment to home ownership.

If you're simply worried that the minute after you make your offer, a better house at a better price will come along, remember this: There's more than one right house for you. There are countless anecdotes of people bidding on homes, losing them and then finding a home that's a better choice the next time out. Still, at some point, you'll have to make an offer or withdraw from the process.

Of course, once you start looking for a home, your indecision may mean you'll lose a few homes before you decide you're really going to do what it takes to buy a home.
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4. Underestimating the responsibilities of ownership.

Renting is easy. You write one check a month, and the landlord is supposed to take care of the rest. Owning a home is more complicated, and the responsibilities of home ownership can weigh heavily.

Here are some of the things you must do if you're a homeowner: You must remember to pay your mortgage, assessments (if any) and real estate taxes.

Here are some of the things you should do: If your tax bill seems unreasonably high in comparison to those your neighbors receive, you should fight with the city to lower it. You should buy enough hazard insurance to protect yourself against loss or damage to your house and its belongings (underinsuring a home is one of the biggest mistakes home buyers make).

If you don't keep your house and landscaping in top condition, your home may not appreciate in value as quickly as others.

You should fight city hall for necessary street and sidewalk improvements and against unnecessary ones. You should work hard to be a good neighbor and improve the neighborhood.

Yes, buying a home means you get to paint the walls any color you like. But if you're not prepared for the responsibilities -- which may mean you'll have to spend the weekend puttering around the back yard, instead of putting on the green -- you may have bought before your time.
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5. Buying a home before you're really ready.

Owning a home isn't for everyone, and it's the savvy home buyer who recognizes that he or she isn't really ready for the commitment.

How do you know whether you're ready to buy a home? It's different for everyone. If you find you're resisting any one particular path, you're probably trying to do something you're not ready for.

Do your homework to give yourself a base of knowledge and comfort. For example, if you find yourself overwhelmed by the thought of choosing a neighborhood, start exploring areas slowly, one by one.

Or if you're concerned about being able to afford a home, sit down and work out a budget. You might find that you're living more cheaply than you could if you owned, though without the long-term financial benefits.

If you're concerned that your quality of life will be compromised by a move, spend some time figuring out how you'll get to and from your job and what kind of time it will take. If you'll add two hours to your commute each day, you may indeed be better off renting until you can afford a home closer to your job.

Buying a home before you're really ready almost certainly will result in a heavy-duty case of buyer's remorse. That's the sinking feeling you get in the pit of your stomach when you've committed yourself beyond your financial or emotional resources. When you buy the right home at the right time, for the right amount of money, you won't have buyer's remorse. Instead, you'll have the pleasure of looking forward to your move as an exciting challenge, rather than dreading it.

If you can't figure out why the thought of moving gives you the jitters, you should consult a professional. Talk things over with your financial counselor, your real estate agent and your mortgage professional.

Remember that millions of first-time buyers have stood in your shoes and taken the steps that you're about to take. About 2 million first-time buyers successfully walk the path to home ownership every year in North America . It is a path well worn, with signposts along the way. You won't get lost. All you have to do is take it one step at a time.
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There's No Time Like The Present For First-Time Home Buyers

If you or any family members are considering buying a first home, this could be the year. Interest rates are at affordable levels, home prices haven't risen significantly in most areas and lenders are offering flexible new options tailored to the needs of first-time home buyers. Chances are, this year you'll be able to qualify for more home for your money.

Before you begin shopping for a loan, there are a few things you should know as a first-time home buyer in order to take advantage of the flexibility in mortgage lending.

First of all, many of the old mortgage “rules of thumb” no longer apply. For example, some loan options enable first-time home buyers to put as little as five percent down on a home — that's a far cry from the old standard of 20 percent. This can be particularly helpful for first-time borrowers who typically have less money for a down payment.
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Determining Your Purchasing Power

Before buying a home, you need to figure out how much you can spend. You can arrange for a pre-qualification estimate from your lender. A pre-qualification will give you a good idea of the total costs of your mortgage and help you determine what you can afford. 

If you know that you're going to purchase a house, but haven't selected a home yet, you can be “pre-approved” for a certain sized loan in advance. This may increase your negotiating power with the seller, so when you find a home, you may be able to buy it more quickly and possibly at a better price.
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Now is the Time

Buying a home is probably the largest purchase you'll ever make and, as a first-time home buyer, it may seem like an overwhelming process — but it doesn't have to be. The changes in mortgage lending have created a buyer-friendly marketplace that works to your advantage as a first-time home buyer.

It is also important to remember that, statistically, most first-time buyers will change homes within five to seven years. Since your first home probably won't be your last home, you should base your decision on what you need now and what you can comfortably afford.
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