• Look at your expenses for the past several months to find out how much money is realistically available for housing.
• Use a mortgage calculator to find out how much your monthly mortgage payment would be for a house. (Play around with various amounts until you discover what purchase price
• Set up automatic transfers to your savings account to save for your down payment and emergency fund.

Instead, consider getting preapproved for your mortgage. Talk to several lenders to find out what interest rate and terms they can offer you. Think about whether you'll want a mortgage with a fixed rate or an adjustable rate.

Once a lender pre-approves, you'll get a letter that says how much you can borrow. Take this with you when you go to look at houses, so you'll have instant verification when you're ready to make an offer. (And remember—you don't have to use the full amount stated in the preapproval letter.)

• Look up current mortgage rates for your area.
• Make appointments with two or three lenders.
• Learn more about mortgage options.

• FHA Loans
• Good Neighbor Next Door (formerly known as Teacher/Officer/Firefighter Next Door)
• Hurricane Evacuees discounted sales
• Homeownership for public housing residents
• Indian Home Loan Guarantee Program

Take the Next Step

• See which of the programs above you might be eligible for.
• Look for other home buying programs in your area.

Did you know you can also look at house listings online? When a home is put up for sale through a realty office, it's added to the MLS registry. Many websites will let you search the MLS listings for free. You can even do advanced searches for size, price, number of bedrooms, and lots of other characteristics. Even if you're working with a realtor, it might pay off to do some searches on your own.

Take the Next Step

• Work on your wish list for your new home.
• Download HUD's house-hunting checklist, and take it with you when you look at a house.
• Visit the MLS website to browse homes for sale in your area.

Take the Next Step

• Talk to your realtor to make sure you understand the offer process.

A professional home inspector will walk through the house examining the physical condition of the building, its plumbing and electrical wiring, the appliances that will come with the home, and the surrounding property. He or she will estimate how soon things should be repaired or replaced, like the water heater and air conditioner.

If the home inspector uncovers problems, you'll need to decide what to request of the seller. Your realtor should guide you through this. Typically, the seller will either have the problem fixed or lower the price of the house to cover the repairs.

Chances are your realtor will recommend a home inspection company that he or she has worked with in the past, but you should feel free to use whichever company you feel most comfortable with.

Take the Next Step

• Look for online reviews of local home inspection companies to get familiar with their work.
• Check out HUD's 10 Questions to Ask a Home Inspector

Take the Next Step

• Call your insurance agent to request a quote for homeowners insurance.
• Learn more about what homeowners insurance usually covers
• Think about whether you might need additional coverage for jewelry, electronics, flooding, or other circumstances.
• Read HUD's 12 Ways to Lower Your Homeowners Insurance Costs

At the closing (sometimes called the settlement), the rest of the down payment will be due if it hasn't already been paid. Closing costs will also be due. You'll sign a number of documents including the mortgage, loan application, prepayment letter, disclosures, and other affidavits.²

If you don't understand something, just ask to have it explained. Your realtor and attorney should be willing to make sure you know exactly what you're signing.