Every buyer should create their own budget and know their limits. A lot of first-time buyers are optimistic about the future and excited about buying a home, so they borrow the absolute maximum they can afford instead of allowing themselves wiggle room for a partial loss of income or for future expenses such as children.

Every buyer needs to get pre-qualified early enough in the process so that they can make some changes if they need to or correct errors on their credit report. Meeting with a lender for a buyer consultation and pre-qualification for a mortgage should be the first step toward home ownership. Yet many home buyers wait until they are ready to start house-hunting before contacting a lender.

While most consumers know it’s important to have a high credit score, not everyone understands how costly a low score can be. All mortgage lending is done with a tier of interest rates and terms based on consumer credit scores. After a mortgage approval, consumers must avoid applying for new credit or taking on new debt.

Home buyers eager to build equity in their homes or who are older and want to live mortgage-free in retirement should consider a 15-year fixed-rate loan or, if they can afford it, even a 10-year mortgage to reach their goals. The 30-year, fixed-rate mortgage is the default home loan for most borrowers but home loan alternatives to a 30-year fixed sometimes make more sense. There’s no reason to pay a premium for a product you don’t need, like a 30-year loan.