Buying a new home can be a very large and scary process. Everything from looking for potential homes you want to buy to getting the cash together to purchase that house of your dreams can end up being a very daunting task. For many people, besides finding that humble abode that you'll simply love, getting the loan to pay for it is a very frightening thing. This article will help you manage the money aspect of your house buying experience.

First off, before you go and get the first loan you see, you should decide how much money you need and how big of a loan you can afford. Before you even go see any bankers, you should have an exact monetary amount in mind and DO NOT let anyone talk you out of it. Many people who are having their homes foreclosed now were talked into a loan larger than they could afford.

Using this tool, input your yearly gross income and also the monthly payments you currently have for debt for a good idea of how much you can afford in a home loan. While a calculator like this is good for a rough estimate, keep in mind that its not perfect and not to take it as financial advice.

After you have a rough idea of what you can afford, start getting money built up for a large down payment on the house of your dreams. The bigger the down payment you do, the less you will end up paying because of interest in the long term. Saving an extra ten thousand dollars now for the initial payment can save you tens of thousands of dollars in interest over the long term.

Now that you have money saved up for a down payment and a rough idea of what you can afford, go and shop for a loan for your home. Shopping for a home loan isn't always the greatest or most fun experience, but smart shopping will save you lots of money. Talk to as many different lenders as you can and get a feel for what they can do for you for a loan. Keep in mind that they CAN and WILL try to get you into a larger loan than you should get and so stick to that monetary amount you decided on earlier. Even if they offer you excellent interest rates on a bigger loan, don't take the bait, play it safe, and you will avoid getting your home possibly foreclosed in the future because of an unforeseen job loss.