1. Don’t … buy a house if you’re planning to move again soon.

 

If you’re a renter, it can be frustrating to write that rent check every month and have no home equity to show for it at the end of the year. But if you aren’t certain that you’re going to stay put for a few years, it’s probably not the right time to buy—equity or no equity.  If you aren’t in an area with a strong rental market that would allow you to cover the mortgage on your home if you move elsewhere, then stick with a rental for now.

 

2. Don’t … bust your budget.

 

Shopping for houses can make you a little giddy. Look at this one! And this one! For a little bit more, you could get granite countertops, plus an office nook! You’re dealing with such large numbers when you’re browsing real estate that it might not seem like such a huge deal to stretch another $10,000 or $15,000 to get the home you really love. But that’s not a game you want to play. What to do: Get preapproved for a mortgage. Not only will this prove that you’re serious to your realtor and to home sellers, but it will also give you an idea of your upper limit.

 

3. Don’t … forget about added costs.

 

Buying a home isn’t just a matter of replacing a rental payment with a mortgage payment. There are also maintenance costs, utilities (which will likely cost more) and property taxes.

 

4. Don’t … put down a nominal down payment.

 

Even with lenders tightening requirements to qualify for a mortgage, it’s still possible to buy a house with as little as 3.5% down. That’s not necessarily a bad thing, but it does mean that you’ll have very little equity in your home when you first move into it. So if something comes up, and you have to sell, you’ll end up owing more than you can get out of the sale once you factor in closing costs. You’ll have to pay private mortgage insurance (PMI) every month until your equity in the home exceeds the 20% mark—and that could take years. (If you can’t put 20% down, your loan is technically considered risky—PMI is insurance that protects the bank if you default on your mortgage.)

 

5. Don’t … neglect to get everything in writing.

 

You wouldn’t be the first home buyer to assume that the kitchen appliances come with the deal—only to discover an appliance-free kitchen on the final walk-through.  Go through your contract with a fine-toothed comb. If the item that you expected to be there isn’t, ask about it—and get it added in writing.

 

6. Don’t … skip the inspection.

 

Even if the home looks like it’s in winning shape, it would be foolish to skip a thorough once-over by a professional. An inspector is there to spot the things you don’t know to look for, like if the chimney is in great shape or whether those little cracks in the foundation are a big deal. He’ll look for signs of water damage and check the insulation in the attic. If there are conditions that will need repair, you may be able to negotiate with the seller to drop the price.

 

7. Don’t … think a brand-new home entitles you to brand-new everything.

 

You suddenly have a formal living room but no formal living room furniture—so you buy some! It’s a mistake to feel like you suddenly have to upgrade all of your stuff to match the shiny new home. Live in your house for a while, so you can figure out what you really need. Then save up for it!

 

Source: FORBES.com article