Now that you've decided to buy real estate, you may be getting excited about looking at properties. But before you go shopping, we highly recommend that you do some additional homework to help avoid disappointment and frustration later.

Start a Mortgage File: A Mortgage File should contain all of your important financial documents. Start by making copies of all your financial statements; bank statements, investments, credit cards, auto loans, recent pay stubs and two years' tax returns. If you haven't already, start saving money for your down payment, you will need a minimum of 3 - 5% of the sales price. Also, you will need additional funds for incidental home buying and mortgage closing costs (i.e., inspections, appraisals, title insurance, etc).

Check Your Credit Rating: Credit scores range between 400 and 800. 620 + is considered "good". 680 + is considered "premium" and may possibly help get you a lower interest rate.

Equifax http://www.equifax.com/ 800-685-1111

Experian http://www.experian.com/ 800-392-1122

Trans Union http://www.transunion.com/ 800-888-4213

Below you will find the contact information for the 3 major credit reporting agencies to help you determine your credit rating. Ask your lender how to improve your credit score if you need to. Going forward, treat your credit like gold.

Get Pre-Approved By A Lender: There are two key benefits to getting pre-approved. First, you will know the numbers; how much house you can afford, your approximate monthly payment, and how much you will need at closing. This will help you make educated decisions throughout the home buying process and eliminate surprises. Second, when you find the property you want to buy, your offer will be better positioned than someone less prepared. This will ultimately help you negotiate a better price and terms for the property.

Quick Tip: Now is not a good time to change careers, move your money around, or buy big ticket items. Lenders like stability. So if you are considering any major changes, it pays to seek the advice of a mortgage professional. If you are tempted to buy a big ticket item, consider the following: A $500 monthly payment (credit card or auto loan) will lower the amount of home you can afford by approximately $83,000. Based on a 30 year mortgage at 6%.

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