They may look the same from the outside, but some of your neighbors have houses – and some of them have financial houses of cards. So, how do you make sure you wind up with the former, instead of the latter?

1.  Decide if you want to pay down now – or pay mortgage insurance later
Making a smaller down payment doesn’t save you any money. Sure, you’ll put down a smaller chunk of change right now (and for some people, that lessens the emotional toll of writing a big check that they’ve saved up for years and years to write). However, you’re going to spend a bunch of money later to balance out the difference – on private mortgage insurance. Ever since the housing bubble burst, lenders aren’t letting buyers put down less than 20% and walk away free and clear. Instead, they have to pay private mortgage insurance every month. Unfortunately, that insurance payment doesn’t build up any equity like a down payment does. So, you’ll have to decide – do you want to put more money down now (and build up more equity right away), or do you want to pay the money out over time (and take longer to build up your equity)? (In most cases, the more equity you can build on day one, the better financial shape you’re in!)

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2.  Don’t forget about the “extras”
So many soon-to-be homeowners (especially the first-timers) get so caught up in asking prices and mortgage rates that they forget all about the OTHER expenses that go along with owning a home – like homeowner’s insurance premiums, homeowner’s association fees, property taxes, and closing costs. All of those things can add up in a hurry, so if you don’t give serious thought to them before you sign on the dotted line, you may end up in a financial hole sooner rather than later!

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3.  Go beyond the commercials
Because mortgage lenders are so eager to get quality borrowers walking through the doors these days, their commercials make the entire home loan process seem like a piece of cake. Don’t fall for it. Even if you have the greatest credit score in the world and lenders are falling all over you, you’ve got to take the time to read the fine print. That way, you can make sure that no one’s sneaking anything past you. After all, points and fees have become commonplace in today’s home loan world. Before you squeal with delight over that super-low mortgage rate, make sure it’s not being offset with a bunch of points or a ton of bizarre fees that you’ll have to fork over at closing time.

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4.  Study your local market
While the nation’s housing market is starting to take baby steps out of the giant hole that the 2008 crash left behind, we’re a long way from being considered “healthy”. Plus, the looming fiscal cliff could send us into a double-dip recession that could knock the housing market right back into that hole. However, some markets are doing considerably better than others. So, before you cash in your savings to make a down payment and commit to a mortgage, see what your specific town’s housing market looks like. How has it recovered so far from the recession? Is there reason to be optimistic? Remember, a home isn’t just a place to live. It’s also the biggest investment you will ever make. Buy wisely, and your investment will grow over time. That way, when you’re ready to move on one day, your investment will make you money – rather than cost you money.