Step 1: Spiff up your credit
Good credit can lower your mortgage/interest rates, potentially saving you hundreds of dollar a month. Order a credit report (usually free online). You can dispute any mistakes, but the most important thing is to build up good credit. Lenders want clients who can pay bills on time and who don’t owe too much to anybody else. Automated bill-paying services help. Stop applying for credit cards just for a free T-shirt or shuffling your debt around. Consider closing some of your accounts. Maxine Sweet, Vice President of public education at Experian, says lenders don’t want you to owe near your limit, which can happen if you consolidate to one card. Your score can dip temporarily when you make any big changes—even for the better—so work on your credit before you seek a mortgage.

Step 2: Start saving for a down payment and closing costs
Home buyers traditionally had to put up a 20% downpayment, now it’s more like 5%. However, some don’t put anything down. “There’s nothing typical today,” says Pat Vredevoogd Combs, president-elect of the National Association of Realtors. You’ll always get a better deal if you make a downpayment. Until you’ve paid for 20% of your home, your lender will probably want you to buy insurance on your mortgage. The buyer also has to come up with closing costs, about 1% of the price.

Step 3: Calculate how much home you can afford
Housing eats up more of everyone’s paycheck these days, but as a rule of thumb buyers spend 25% of their pre-tax pay on housing. That translates roughly to a mortgage of 3 times your salary. Consider your entire budget: How is your credit card bill, student loan or kids’ tuition? How much will your new palace cost to maintain? Will you get a big break on your taxes from the mortgage interest rate deduction?

Step 4: Shop for a mortgage
New loan offerings make it easier to buy a home, but harder to pick which mortgage is right for you. The standard 30-year fixed rate mortgage allows predictable payments. If you’re planning on moving quickly, consider an adjustable rate mortgage, which has low interest and payments for the first year. Buyers have really low starting payments with interest-only loans, but they don’t build up any equity in their homes. These new mortgages are often sold to those who want to buy more house than they can afford. Compare terms and rates from several sources. A pre-approved mortgage will let you move quickly on the right house. Your lender usually calculates your monthly expenses—including principal, interest, taxes and insurance. You’ll pay a monthly bill into an escrow account instead of getting clobbered by annual taxes.

Step 5: Shop for a home
Make a list of the features you want and don’t want. Realtor’s are a great help, so much so that some start planning months before they’re ready to buy. The buyer pays the real estate commission, which typically runs 5%, split between the seller’s agent and buyer’s agent. So first time buyers—get the service basically for free.

Step 6: Make an offer
How much did similar homes sell for nearby? How long has this house been on the market? Our realtors can evaluate market conditions and help you make a reasonable offer.

Step 7: Sign a contract
You sign and pay a deposit that is held by a neutral third party. Typically buyers can back out if the home inspector finds trouble or if they can’t find financing, homeowner’s insurance, etc.

Step 7: Take a Close Look at Your House
Make sure your contract is contingent on a home inspection for a detailed, objective evaluation of your home’s infrastructure. Afterwards, negotiate with the seller over needed repairs. Be sure the title of the house is free of any liens. Your bank will appraise the house, too.

Step 8: Shop for homeowners insurance
Shop around, but your own car or life insurer will probably give you a good package deal. As always, a higher deductible saves you money.

Step 9: Sign papers
You’ll meet at lawyer’s office or title company, sign a big stack of papers and receive the keys to your new home.

CONGRATULATIONS!!!