It's time to buy your new house! You're excited, amazed and just a little scared. You've figured out where to put your furniture and what to paint the master bedroom. What could go wrong?

Quite a bit, actually. As a new homeowner, keeping these tips in mind will help you enjoy your home to its highest potential, and avoid situations that might negatively impact your credit, your home, and your sanity.

1. When making renovations, hire licensed contractors and check their references. Not every contractor is a charlatan, but there are certainly some crooks out there ready and willing to take advantage of inexperienced homeowners. A good roofer, plumber, or construction company will always be happy to give you references, show you examples of previous work, and - most importantly - be licensed, bonded and insured.

2. Don't purchase more of a house than you can afford. The housing bubble burst partly because of adjustable-rate mortgages that quickly sent previously-affordable payments sky-high and contributed to the foreclosure problem. While it might not be your dream home, a house that you can afford is a good investment - and, what's more, you won't have to worry about a payment increase or being kicked out on the street.

3. Get a comprehensive and detailed home inspection before you buy, and check with the county or city to make sure all permits are up to date. Purchasing a house without knowing whether or not the plumbing is safe is a definite no-no, and sometimes, new homeowners will be required by law to make updates - especially in older homes, where electrical, heating and safety systems might not meet modern regulations.

4. Ask questions! Don't be afraid of looking stupid. Real estate agents, contractors, and other professionals are there to help you through thorny home-buying and renovation experiences, but they can't read your mind. Asking questions and making sure you understand exactly what is going on at all times will help you keep tabs on what's going on as well as help you to spend your money in the right place

5. Be honest with yourself about your mechanical prowess. Even if it's your dream home, don't buy a "fixer-upper" if you don't have the skills to deal with major issues yourself. Bob Vila can fix anything, but he didn't get to his knowledge level just by waving a wand. Can you rewire an electrical box? What if a pipe clogs up, and sewage comes up through the shower? Can you replace a sheetrock ceiling? If the answer is "no" to any of these questions, stay far away from the "fixer-upper." You don't want your dream to turn into a nightmare.

6. Finally, location, location, location - it's clich, but true. Homes have a context, and their values fluctuate due to what's going on around them: school districts, transportation, affluence, economic stability. A house in an economically unstable area, in low-rated schools and far away from transportation is a home, but it won't increase in value. Concentrate your search for a good house only in places that are close to good schools, hospitals, and jobs; stay away from homes near industrial areas, hazards, swamplands and near flight paths, trains and freeways.

With these tips in mind, even the newest homeowner can put their stake in society and have a home to be proud of. Remember - ask questions, check references, and be honest with yourself and others, and you're on the path to having a happy home!

Learn more about this author, Catherine Oz.
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