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Are there mistakes I can avoid in my home finances?

Don’t choose the wrong mortgage: Investigate all your options, then lay your choices side-by-side and do the math, making sure to compare worst-case scenarios.

Don’t confuse “pre-approved” and “pre-qualified” with a loan commitment: When you are “pre-qualified,” the lender is making an educated guess about how much you can borrow based on information you’ve provided. When you are “pre-approved,” the lender has verified everything you have told him or her and is offering to lend you up to a given amount at current interest rates – under certain conditions. Final clearance and a check at closing – a loan commitment – are subject to an appraisal satisfactory to the lender, good title, a last-minute credit check and other verifications.

Don’t have too much credit: Excessive credit is almost as bad as no credit or even bad credit. Postpone any big ticket purchases until after you buy your house.

Don’t lie on your loan application: Exaggerating your income on a mortgage application or putting down other untruths can be a federal offense.

Don’t hide if you can’t make your payments: The worst thing you can do is ignore phone calls and letters from your lender when you are behind on your payments. Lenders are the enemy only if you give them no other choice.

Don’t skip a home inspection: Independent home inspectors examine houses from stem to stern.

Don’t hire just any agent to sell your house: All real estate agents are not the same.

Don’t fail to check out a remodeler: Reputable remodelers don’t solicit door-to-door, and they don’t cut price. Check out a potential contractor thoroughly.

Don’t pay too much up front: If a contractor asks for more than a third of the contract price as a down payment, chances are something’s wrong. Never give a contractor cash.

Don’t burn your mortgage: Make a copy and burn that instead. Keep all you loan documents in a safe place.