The thought of owning your first home is exciting but it is important to be completely prepared. A key part of being prepared is to first evaluate your finances. Experts recommend that buyers spend no more than 28 percent of their income on housing costs. In addition to your mortgage payments, you will need to pay for utilities, maintenance, repairs, property taxes and homeowners insurance. If the numbers make sense to you, taking a few steps at the beginning of the home-buying process can save time, money and aggravation.

Examine Your Credit

Right now, blemished credit or the inability to make substantial down payment can put the kibosh on your homeownership plans. That’s why it pays to look at your creditworthiness early in the home-buying process. Get your free annual credit report and comb through it for errors and unresolved issues. If you find mistakes, contact the credit reporting bureau to make sure they are corrected. It’s also a good idea to get your FICO score, which will cost you a small fee.

Get Your Docs in a Row

Collect pay stubs, bank account statements, W-2s, tax returns for the last two years, statements from current loans and credit lines, and names and addresses of your landlords for the past two years. Have these ready to show to the lender. This may seem like a lot but, in this age of tight credit, don’t be surprised if your lender needs a lot in the way of documentation.

Find Lenders and Get Preapproved

Getting preapproved for a mortgage helps you bargain from a position of strength when you are house hunting. Your local bank and a credit union are good places to start your search. Applying to multiple lenders in the same month helps increase your chances of getting a loan approved at the best rate possible without dinging your credit score too much. If you can’t find a bank willing to lend to you, consider an FHA loan. The Federal Housing Administration has a program that insures the mortgages of many first time homebuyers. As a result of this guarantee, lenders who might otherwise feel uneasy about your qualifications will be more inclined to lend to you. As a bonus, the FHA only requires a 3 percent to 3.5 percent down payment from first time homebuyers.