One of the most important things to do when searching for a way to finance the purchase of a new home is to do the math and find out how much money you can spend on it each month. The rule is that all of your housing costs each month, including house note, property taxes and insurance cannot exceed 29% of your gross monthly income. In addition to that, your housing costs plus your other monthly long-term debt should not exceed 41% of your gross monthly income. Furthermore, you must get a copy of your credit report and check your credit score. Having a bad credit score, or one lower than 580, means that you will have problems with obtaining the loan in the first place, not to mention that you will be forced into paying higher interest rates.

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