magua

1) Know what you can afford. Figure it out before you go looking for houses. Don't go out on tours, find a house that you love, and then try to figure out if you can afford it, because chances are you won't be able to, and then you'll be heartbroken and no other house will look as good, or you'll try to afford it anyway and fail.

2) On the topic of affordability, keep in mind that you also have to pay property tax (varies by county), most mortgages require you to have a home insurance policy (which is a good idea anyways), and if you put less than 20% down, you'll have to pay PMI (property mortgage insurance). Those add up.

3) Also on the topic of affordability, keep in mind that closing costs can easily be $5,000, especially if you're buying somewhere near a city.

4) On the good side of affordability, note that your mortgage _interest_ (but not principal) is tax deductible. Since you pay something like 95% interest, 5% principal the first year, this is a big tax savings.

5) Finally, if at all possible, try to close the sale at the end of the month. Mortgages are paid a month behind, so you won't have to make a first mortgage payment until the start of the second month (eg, if you close April 26th, you won't make your first payment until June 1st). _However_, you have to pay interest (but no principal) to cover the days from when you sign till the end of the month (so, if you close April 26th, you have to pay 5 days interest). This is all interest, no principal, _and_ it's due at signing. Keeping the signing near the end of the month reduces the amount you're shelling out at closing.

Hmmm. Other useful tips:
* Before you start looking for houses, get yourself pre-approved by a mortgage company. Some sellers will refuse to seriously deal with anyone who is not pre-approved. Being pre-approved doesn't mean you _will_ get the mortgage, but it's reasonably certain.
* Get the house inspected by a certified inspector. It'll cost $200-$300. Get it done anyway. At worst, you find nothing wrong with the property. At best, the problems that are found result in a cheaper selling price, or you not buying a place that would be a money pit.
* Talk to your possible neighbors. Ask them about the neighborhood. Are kids outside playing? Where's the nearest: convience store, school, hospital, police department, grocery store, etc?
* How long will it take you to commute to work?
* It may vary based on your locale, but in some places, a buyer's agent is your friend. Most take a comission from the seller, so they're free for you, and they know how the market works, if this seller is trustworthy, etc.
* Take a walkthrough of the house at least 2-3 weeks before closing, with the seller's agent, and the inspector. Make sure that anything the inspector finds is reported to the seller's agent, and get an agreement that either the problem will be fixed or the price lowered before the selling. Take a second walkthrough the day of, or day before, the selling, to make sure the problems were indeed fixed.
* If, for whatever reason, one or more problems are not fixed, the seller may offer to escrow part of the payment. The way this works is that a contract is written up that the seller cannot take this money unless the problem is fixed; if it's not fixed, the money is returned. If you agree to this, make _sure_ that the escrowing party is neutral -- do not let the seller's agent, or the seller's lawyer act as the escrowing agent. Also, make sure it's specified how long the problem has to go unfixed before you get your money back.
* A real estate lawyer may be a good idea, especially if the house has problems. One'll probably run you $500.
* Ensure that there is no prepayment penalty in your mortgage (no penalty for paying early; this would also apply if you sell the house). Prepayment penalties are illegal in some states, but not all.
* If you're not going to live in the house for at least five years, it is probably not cost effective for you to buy, as opposed to rent.