First-Time Buyer Tips for 2010

Shopping for your first home can be one of the most stressful transactions of your life.

Not only do you have to find someplace you want to live-more than a roof over your head, a home with light, space, and comfort-you also have to master (and negotiate with) an entire network of agents, brokers, lawyers, and movers. There are agents to spar with, inch-thick contracts to sign, movers to find, boxes to pack, and plenty of people to pay before you spend a single night in your new bed. Renting seems simple by comparison.

Before any of this, however, comes a simpler test: Can you afford to purchase a home? Or are you better off renting? The recession and falling housing market have made home prices more affordable to more people. Interest rates are at record lows. Those with good credit can get excellent mortgages. Despite the grim news about joblessness, for many this is the best time to buy. And thanks to Congress's recent extension of the federal housing tax credit for first-time homebuyers -- $8,000 for qualified buyers - more people than ever, from a wider cross-section of the economy, can enter the market.

But no matter how the rules are changing, buying your first home is still a stressful, personal decision. A mortgage is likely to be the biggest investment you will ever make in your life-and unlike a rental agreement, you can't just leave after 30 days if you don't like your new home.