You've decided that you're ready to buy a home -- but you find yourself overcome with fears and anxieties. Or, on the other hand, perhaps you're bubbling with a bit too much excitement.

Before you sign on the dotted line, pause for a moment and ask yourself if you're falling into one of these common homeowner mental traps:

Trap No. 1: Assuming that buying is always better than renting

The idea that renting a home equals "throwing money away" is one of the most pervasive myths floating around.

In reality, the decision to buy vs. rent should be based on factors such as the average housing and rent prices in your location, the amount of time you'll live in that dwelling, your tax bracket, the mortgage rate for which you qualify, property tax, HOA and insurance rates in your area, projected appreciation in your area, inflation assumptions, and more.

Here's a simple example: Assuming you'll live somewhere for three years, if you can buy a home for $100,000 that would otherwise cost $1,000 per month in rent, buying may be the better option. If, however, you need to pay $650,000 to buy a home you could rent for $1,000, renting might truly be the better choice.

Trulia's rent vs. buy calculator can help you decide which is the better option for you.

Trap No. 2: Believing your current needs reflect your future needs
Let's imagine that you're part of a child-free couple that likes to travel, lives with minimal possessions, and doesn't want to spend too much time maintaining your home. You might choose a small home that fits your lifestyle, while disregarding the school district during your decision-making process.

But will you still have the same priorities in five years?

Remember that you're buying a home to suit your future needs, not just your current ones. Purchase a home that you'll be able to "grow into" or "shrink into" as the size of your family either expands or contracts. Anticipate other factors such as maintenance, HOA fees, proximity to jobs (and potential future job sites), school district, yard size, neighborhood safety and walkability.

Perhaps today, you want a swimming pool -- but in three years, when your youngest child moves off to college, you want the freedom to travel without needing to worry about pool and yard maintenance. Or maybe you don't need a yard today, but in a few years, you'd like to adopt a dog.

Trap No. 3: Fear of getting "priced out of the market"
Home prices have skyrocketed in the past five years. It can be tempting to believe that prices will continue to rise indefinitely, and that if you don't purchase a home today, you'll get "priced out" of the housing market.

Conversely, it's also tempting to believe that if you buy now, you'll definitely flip your home for a profit when it's time to sell.

Neither of those are foregone conclusions. The housing market, like all industries, is cyclical: Prices rise and fall. In addition, housing is local: price and appreciation activity in Kansas City, Mo. doesn't necessarily reflect activity in Jacksonville, Fla.

Leave speculation aside. Purchase a home based on your family's budget and needs, not your guesses about what the future may or may not hold.

Trap No. 4: Believing all renovations are profitable
Are you selling your current home in order to move into a different one? If so, you might be in the midst of renovating. Many homeowners update their kitchen, bathrooms, landscaping, and other features in order to make their home more attractive to buyers.

But that doesn't mean you'll recoup the cost of your renovations. While some updates might fetch you a higher price, other updates simply lack a return-on-investment. Replacing peeling laminate countertops with builder-grade granite might help you house sell faster, but upgrading to a rare style of granite with an ornate beveled edge probably won't translate to a thicker bottom line.

Bottom line
There are plenty of myths and assumptions about the housing market. If you believe too deeply into these ideas, you run the risk of overspending.

Don't fall into the trap of thinking "housing prices will always rise," "renovations will always pay off," or -- worst of all -- "this time, it's different." Focus on purchasing a home that you cherish that fulfills your needs and wants, both now and in the future. And enjoy your new space!

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