by Richard Lloyd Evans

Created on: September 06, 2007

For most people, getting the most house for your money is one of the most important challenges you will face. Your home is probably your biggest investment. Making sure you get the most bang for your buck is much more important than saving money on laundry soap at the grocery store. Here are seven steps to do it right.

1) GET YOUR CREDIT RIGHT
Your credit is one of the most important factors in getting more house for your money. Good credit means a low mortgage interest rate and that means you can buy a bigger house for the same money, or the same house for less.

Get a copy of your credit report and check it for your score and to make sure it is accurate. If you see incorrect information that damages your credit, notify the reporting agency and get it removed.

Lenders like to see borrowers have credit scores above 680, have low debt and verifiable employment and income for 2 years. This will make you a PRIME borrower and able to get the best loans at the best rates. If you are short on any of these qualifications, you'll be a SUBPRIME borrower where loans are more expensive. Work to improve your credit profile as much as you can.

2) SHOP AROUND FOR THE BEST MORTGAGE
Lenders are not made the same and neither are their loans. In fact, because lenders charge different amounts for origination fees and other loan costs, what seems to be identical loans can be widely different on how much they will cost you.

Contact lending officers from small local banks, as well as mortgage brokers who work with numerous national lenders. See who offers the best loan terms for you. Make sure you find out what all the fees are that will be charged for each loan. If you find one loan program that is better than the others, see if the lender will LOCK IN the interest rate, essentially guarantee it for 30-60 days while you shop.

Also, you should be able to budget to find out what payment you can afford, and how much that translates into the amount of the mortgage. Now you'll know what price of a house you can afford. Make sure you take into account not only taxes and insurance for your house payments, but also any potential income tax savings you may receive for being a home owner.

3) DECIDE WHAT AND WHERE YOUR HOUSE NEEDS TO BE
Some people start driving around willy nilly looking for a house, find a house, and think they are successful. Wrong! Real estate is location, location, location and where you buy, including the schools, convenience to work and other factors, make a huge difference.

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