If you area a first time home buyer, choosing a mortgage can seem like a daunting task. It gets a lot easier if you learn some basic information. In one of my previous jobs, I worked as a mortgage loan officer. I've also bought several houses, and I'd like to pass along some tips on shopping for a mortgage.

Obviously, the better your credit, the easier finding a mortgage will be. Banks look at your credit history when you apply. If you havn't been paying your bills on time, it will be much more difficult to find a loan, especially in today's market. For most banks, payments on your house are considered more important than payments on credit cards and cars, but all credit is important. If you are thinking about buying a house, get your bills up to date as quickly as possible, then keep them current.

Second, loan officers look at how much money you make. If you are a self-employed person, start documenting how much money you make. This is typically the opposite of what your accountant will tell you because your accountant wants to hide money from the IRS. You loan officer will want to see proof of your income.

Typical mortgage guidelines are that your monthly mortgage payment should not be more than about 25% of your monthly take home pay. All of your monthly payments should not be more than about 32% of your take home pay. This allows you to have extra money for things besides paying debt. They know that you have needs for things like food, gas, electricity, and water.

If you use these guidelines to figure out how much you can afford to pay for house before you start shopping for one, you will make the process much easier. If your net pay is $5,000 per month, multiply that by 0.25 to find a maximum monthly payment of $1,250.

Remember that many mortgage payments include escrows for your property taxes and homeowner's insurance, so the mortgage payment that you will be able to afford will be smaller than $1,250. (Escrow means that you pay the lender a portion of your tax and insurance costs each month, and the lender pays these bills when they come due.)

Next, do an internet search for "mortgage payment calculators." Take an educated guess as to what the interest rate will be. You can find out what rate lenders are offering in their ads, posted at the bank, or on the internet. Put in the number of months or years that you would like for your mortgage. Thirty years is the most common. Then guess at loan values until you

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