5 costly mistakes first-time buyers make

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

1. Ignoring the cost of a low credit score. Lower-score borrowers pay thousands of dollars in increased interest rates over the life of the loan.

2. 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. Expensive repairs can be financially devastating.

4. Buying without contingencies. Buyers should give themselves an out if the inspection turns up problems or if the bank raises their interest rate.

5. No money for insurance. Insurance can be surprisingly pricey. Buyers who don't budget for it face a nasty surprise.

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