Buying a home, and applying for a mortgage, is likely to be the most significant single financial decision you ever make. It is vital, therefore, to learn from the mistakes other mortgage shoppers have made, and to avoid making those mistakes yourself.

Some of the most common pitfalls encountered by mortgage shoppers are: Not taking advantage of programs designed for first time home buyers. If you do not take advantage of the various programs designed for first time home buyers, you could be throwing money away. These programs, generally sponsored by city, state or county government agencies, are often able to offer lower interest rates and better terms than can be found through private lenders. Some of these programs are designed for buyers with bad credit, but most of the programs are tailored to help those who lack the money for a down payment. Not getting your credit report.

Before you shop for a loan, order your credit report and correct any inaccuracies. Otherwise, the blemishes could push down your credit score and push up your loan costs. If you are financially active, practice safe credit. You should keep tabs on your credit report every six months and at least once a year. Confusing the terms qualify and afford. When determining how much home you can afford, remember that your mortgage payment, plus your ongoing debt (credit card payments, car payments, student loans, child support and so forth) should be no more than 41 percent of your gross income, or you are getting into expensive trouble. For example: gross monthly income of $2,000 multiplied by 41 percent equals $820. Shopping for a monthly payment. When comparing mortgage loan products, it is important that you look at the big picture. For example, while a 40-year mortgage may offer a slightly lower monthly payment than a 30-year loan, you end up paying more in interest over the life of the loan. In addition, it will take much longer to build equity.