Buying your first home is an exciting-but anxiety-provoking-event. While having a place of your own is a dream most of us share, it's also probably the biggest purchase you'll ever make, and you want to be careful to avoid mistakes.

HomeSide's First-Time HomeBuyer's Guide is designed to help you understand how to find the home you want and prevent costly errors and hassles. Take a look at these helpful tips, and you'll have the confidence you need to become a first-time homeowner!

• Common Mistakes to Avoid
• Identify What You Need and Want in a Home
• How Much Home Can You Afford?
• The Smart Way to Home Shop
• Creative Financing Solutions
• Preparing for a Smooth Application Process

Assuming that you must make at least a 20% cash down payment to buy a home. With HomeSide's conventional and FHA loans, you need as little as 5% down and some VA loans can be obtained with 0% down. Looking at homes before you are pre-approved. When you are pre-approved, you have more buying power with your seller; in addition, you know for exactly how much you've been approved. Underestimating the amount of cash you will need to close. Generally you will need 3% to 5% of the sales price for closing costs. Costs vary by area. Some loans will allow you to roll into your mortgage most of the closing costs. Failing to read the purchase and sales agreement before you sign it. This is a legal contract, so it's always best for you to hire your own real estate attorney to review it. Do not sign anything unless you fully understand it. Ask questions. Failing to have a property fully inspected. If you neglect inspecting the property and something goes wrong after you close, you are responsible for the repairs. If you have the property inspected before you sign the contract, you can make it a condition that the sellers make necessary repairs prior to closing.

Before you start looking, it's critical to write down your needs and wants in a home. Your needs are the essentials-the things you absolutely must have in a home for it to be acceptable to you. Your wants are features you'd like to have in a home, but that aren't deal-breakers for you. Consider the following for your needs and wants list (feel free to add as many as you'd like): Square footage of the home Number of rooms Number of bedrooms Number of baths Size of rooms Location of bedrooms Formal dining room Size of kitchen Family room Home office or library Mud room Basement or finished attic Storage areas Hot tub Pool Size of lot Garage (specify how large you'll need it to be, i.e., two-car, or two-car with workshop area) Space for boat/RV View Garden area Trees Type of neighborhood Streets, sidewalks Bike paths Distance to work Distance to shopping Distance to schools Distance to transportation Distance to recreation

Generally, what you can afford to buy is based on two primary factors: Up-front payment. You need to determine how much you can pay up front for a down payment and for closing costs. Most homebuyers put down at least ten percent of the purchase price, although some programs require less. However, depending on the size of the down payment, you may have to pay private mortgage insurance. Qualifying ratio. Typical qualifying ratios are 28%/36%. Most lenders will first assess whether the total amount you'll pay for your mortgage, property taxes and insurance is no more than 28% of your total income. Second, they'll ensure that your mortgage costs and other debt payments such as credit cards and auto loans are no more than 36% of your total income. Programs are available with more relaxed qualifying guidelines.

Get pre-approved to avoid disappointment and to provide yourself with an advantage over other buyers. In today's competitive home-buying market, it's smart to take the time to get pre-approved for a loan before you start shopping. Sellers and real estate agents will be much more open to working with you if they know you have already taken care of financing arrangements. To get pre-approved for a loan, you'll complete a loan application and usually pay a small fee. You may also be asked to provide recent tax returns, which you'll typically have to turn over anyway to obtain a final loan.

Keep in mind that pre-qualifying isn't the same as being pre-approved. Pre-qualifying with a lender is based on a limited amount of information and can only give you a general range of what you may be able to qualify for. The details you'll provide for a pre-approval give the lender the confidence to make a firm commitment about the size loan you'll be approved for. With Advanced Approval, HomeSide's pre-approval program, we'll provide you a commitment, so that you can focus your home search on properties for which you qualify.

Don't be discouraged if you think coming up with a down payment or closing costs is impossible. If you qualify, you may wish to take advantage of an FHA or VA loan. Government loans are more flexible then conventional loans, require little to no down payment and are more lenient with credit issues. HomeSide Lending offers competitive FHA and VA loans. In addition, other programs are available to assist first-time homebuyers through federal, state and local governments, corporations and non-profit organizations.

With careful preparation and organization, your loan process can go smoothly and hassle-free. At HomeSide Lending, our Loan Officers will help you through every step. Information required will vary by loan program and your personal situation. When you call to apply, you'll be told what documentation you'll need to gather. Examples of the type of information you may need to apply include:

• Information about the home you want to buy (sales agreement, real estate agent or builder contact, etc.)
• Information about the home you want to buy (sales agreement, real estate agent or builder contact, etc.)
• Information about the borrower (contact information, social security number, employment, etc.)
• Documentation to support borrower assets and liabilities (tax returns, account statements, etc.)

Under federal law, you should receive an estimate of your closing costs prior to closing. Keep in mind that this number could change slightly, because without knowing the exact date of closing, it's impossible to come up with a precise figure. Closing costs usually fall within three to five percent of your home's purchase price and vary by state.

• When your application has been submitted, your lender will send out financial and employment verification letters and order a credit appraisal.
• Shortly thereafter, an appraiser will inspect the home and a written appraisal will be sent to the lender.
• When the appraisal, credit report and completed verification letters are received by the lender, your Loan Officer will put together a package of all the data to send to underwriters, who will determine whether or not you are a good credit risk. Your Loan Officer will make sure your loan package presents the strongest case for your approval.
• Shortly, you'll hear one of three answers: your loan has been approved; your loan has been conditionally approved (approved if you agree to accept certain conditions); or your loan has been denied.
• If your loan is denied, most lenders will allow you to reapply if new supporting information can be provided.
• If you're approved, final documents will be prepared for the closing