Many underestimate the actual amount of money they need to have on hand before purchasing their own home. Down payments, inspections, appraisals, and closing costs all add up and can surprise first time home buyers and jeopardize their chances of owning their own home.

The following are proven tips for home buyers to prepare them for purchasing their home and saving some money in the process.

Managing your credit score is critical. The loans available to you, the costs and interest rates will be determined almost solely on your credit score. Even small improvements in your score can make a large difference in the loans you are offered. Loans are priced according to the perceived risk, and your credit score and down payment are the determining factors.

Your loan officer can get you a copy of your credit report for a small charge, or you may obtain one free copy by visiting http://www.annualcreditreport.com/. It is a good idea to review it early to determine if there are any errors or items that need to be corrected. If you do have any items that need to be corrected, your loan officer should be able to help you with the dispute process. As well as, give you some suggestions on how to improve your credit rating.

A good credit score will allow you to secure a loan with a lower interest rate and/or with less money down. This can translate into a savings of thousands of dollars in a relatively short amount of time.

Before you start shopping you shoud talk to your loan officer, get pre-approved and decide on the maximum montly house payment you want to have. Pre-approval is simply matching your available money for a down payment and your current credit score together with the loan programs and rates that are available to you. This will tell you what your maximum purchase price allowable will be and thusly the proposed payment.

One important thing to bear in mind is that just because you have been approved for a certain loan amount, it doesn't mean that you should spend that much on your new home. Many times it is more prudent to shop for a home that is less expensive than the maximum amount you are approved to borrow. Just because you are qualified for it, doesn't always mean that it is in your best interest to take it.

The right real estate agent can potentially save you thousands of dollars. Most real estate agents have a group of loan officers that they work with and trust, and that may be willing to give you preferential pricing on your loan. Additionally, they can arrange the closing to fall at the end of the month and allow you to effectively put off your first mortgage payment a month. If you need a referral to a trustworthy agent anywhere in the country, feel free to contact me.

Buyers are often times not informed about the small mistakes that may cost them dearly. Here is a list of just a few of them that can change your credit score which can adversely affect your ability to get a loan. Once you are in the process of shopping for a home watch out for these!

• Don't change jobs, become self-employed or quit your job during the loan process.
• Don't buy or refinance a vehicle.
• Avoid using credit cards.
• Don't spend the money you set aside for closing costs.
• Be honest on your loan application, the truth will be come out in the end.
• Don't apply for new credit cards or lines of credit during your loan process.
• Don't make large deposits without first checking with your loan officer
• Don't change bank accounts
• Never co-sign for another person's loan.

If you still have questions about buying a new home, financing, what you can do to improve your credit score, feel free to email me at Jacquie@jacquiecliff.com. If you are in Western Washington I can help you personally with any of your real estate of loan needs as well!