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1) Remember to ALWAYS shop around for a mortgage. Make sure to go directly to the financial institute you bank with. They may be able to give you a good rate based off of the already established relationship you have with them. Another great source would be a Mortgage Broker. They have the ability to shop around to multiple banks at one time. This Saves you from filling out multiple applications and will also ensure that you have every possible scenario available to you. They can also help with Create financing (Lower FICO scores, lower down payments, self employed etc.)

2) Run numbers! Sit down and look at your monthly budget. Make sure that you are not stretching yourself . When purchasing a home you will have your mortgage, property taxes and insurance. (If condo or TIC insurance is typically billed into the HOA monthly fee.) A smart number to remember is that your Mortgage (Mortgage, taxes, Insurance or HOA if applicable) should not exceed 35-40% of your net income. All always remember to have a reserve amount of money that if you are to loose your job you are ablt to maintain your payments. Typically in todays Economy 6-12 months of reserve (Total Monthly Bills) should be sufficent enough.

3) Ask Questions! Dont assume that your agent or Mortgage Broker is telling you everything. (Although they should be in my opinion!) Take responsibility in knowing exactly what you are getting into. If you are not sure how someone came up with an answer have them explain it to you. Agents do this on a regular basis and to them purchasing a home is nothing, but to a consumer who does this typically 1-2 times in their life, its the complete unknown. The more knowledge you have the easier it becomes to place an offer on a home.

4) Get Pre-Approved not Pre-Qualified. Today the lending industry is changing every minute. What is the difference between the two?

The distinction between the two is that pre-qualifying determines how much a lender will lend you. It involves obtaining a letter from the loan officer who looks at your debt ratios, gross income, and work history to see if youre qualified to make the monthly payments. This usually can take weeks while you wait for a pre-qualifying letter.
Pre-approval, on the other hand, takes it a step further and usually involves non-refundable fees. This process takes into consideration your credit history report, income verification, confirmation of down payment, and ability to pay closing costs. Once approved, the pre-approval letter lets the real estate agent and seller know youre qualified to negotiate terms.

This is VERY Important!! Sometimes we think that we can afford that $500,000 home but in reality we can only afford the $300,000. Also remember that just because you are approved at $500,000 doesnt mean you have to spend that on a home. Do what is comfortable for your lifestyle.