You buy a home at a time in your life when you are settling down. You finally reach the point when you can afford to own your own place. Perhaps you're at this point in your life because you've secured a decent job, or because you've developed responsible spending habits. In any case, you're probably not trying to buy a house when you're flat broke. Indeed, this is probably a time in your life when you're buying several nice things for yourself.

In the months and years leading up to your first home purchase, you should be careful what you buy. Making large purchases can lower your credit score. A brand-new plasma TV could cost you a lot more than the purchase price — it could cost you thousands of dollars in interest over the life of your mortgage. It may be difficult to restrain yourself at this time in your life; after all, you finally get to enjoy the fruits of your labors. However, as you approach the time when you'll buy a home, hold off on spending. Wait until after closing to buy those home furnishings and luxuries.

A common pitfall that catches first-time homebuyers is the car payment. Shortly before buying your home, you may be tempted to buy a nice new car. Unfortunately, the payments associated with a newer car can jeopardize your mortgage. Lenders will look at a number of ratios to determine what type of loan you qualify for. One of those ratios is your ratio of debt payments to monthly income. If a high percentage of your monthly income is already heading out the door to pay for your car and other items, how are you going to make your mortgage payments? A new car is one of those things that you should wait on if you're considering buying a home.