1. Check your credit first.
It's important to make sure your credit is as healthy as possible before you attempt to get pre-approved for a home loan. Make sure you don't have any outstanding debts or suspicious activity on your credit report, and if you do, clean it up! You'll also want to use your reports to calculate your debt-to-income ratio, which is an important factor in procuring a home loan, and also vital info for figuring out how much home you can comfortably afford.
2. Estimate your property taxes and homeowner's insurance when calculating your monthly mortgage payment.
The real estate listing website Zillow has a special mortgage calculator that can provide you with an estimate for what you'll be on the hook for each month, after local property taxes and homeowners insurance are added to your mortgage payment.
3. Have your financial paperwork in order.
When you apply for a home loan, lenders will request at least a month's worth of recent pay stubs, your W-2s for the last two years, and recent bank and investment account statements for the last month or more, so have all your paperwork ready to go before you start contacting them.
4. Get pre-approved before you shop.
It's important to know what sort of home loan you're qualified for before you start shopping. Don't wait until you are ready to buy to secure financing, getting approved takes time and could allow that dream home to slip through your fingers.
5. Research federal and state home loan programs for first-time home buyers.
Most states have special programs in place to assist first-time home buyers who are on a budget for buying a house. They can offer special incentives to first-time home buyers such as lower down payments, low interest rates, and special tax exemption if you buy in certain underserved or rural areas. (You can find a state-by-state guide to such programs on HUD.gov.) The Federal Housing Administration itself also offers special, low-interest home loans to first-time home buyers. There are also special financing options and grants available to assist teachers and veterans with their first home purchase.