5 Costly Mistakes First-Time Buyers Make

Here's a great set of pointers from CNNMoney's Les Christie. These are great things to remember - we work very hard to educate our clients, and every bit of reinforcement we can get helps.

Here's what Christie has to say:

Buying a first home can be a daunting experience. Here are five common and costly mistakes that novice home buyers make:

1. Ignoring the costs of having a low credit score. Lower-score borrowers pay thousands of dollars in increased interest rates over the life of the loan. (We can refer you to our strategic alliance partners that can help you bring your scores up, resulting in huge savings - ask us how!)

2. Muddying the waters by shopping for other things before closing. Lenders continue to check credit scores right up until the time of closing. Too much shopping could cause the lender to take back the loan.

3. Scrimping on an inspection. Being surprised by the need for expensive repairs can be financially devastating. (We always recommend an inspection. In fact, if a client chooses not to have a property inspected by a qualified inspector, we ask that they sign a waiver indicating that they have been advised otherwise and wish to skip this step.)

4. Buying without contingencies. Buyers should give themselves an out if the inspection turns up problems or the bank raises the interest rates. (In Texas, our option contract takes care of this for us. Normally we can negotiate a 7-10 day option period for $100-200 - a real steal for an unrestricted right to terminate. When we're representing sellers, we work to get a $300-500 fee for those same 7-10 days.)

5. No money for insurance. Insurance can be surprisingly pricey. Buyers who don’t budget for it can face a nasty surprise. (Again, we will refer you to several of our strategic alliance partners that can help save you tons of money on your insurance premiums.)

Source: CNNMoney.com, Les Christie (04/19/2010)