Evaluate assets and liabilities
So you don't owe too much money and your payments are up to date. But how do you spend your money? Do you have piles of money left over every month, or are you on a shoestring budget?
A first-time homebuyer should have a good idea of what is owed and what is coming in.
"You should understand a little bit about monthly cash flow," says Winesburg.
"If I were a first-time homebuyer and I wanted to do everything right, I would probably try to track my spending for a couple of months to see where my money was going," he says.
Additionally, buyers should have an idea of how lenders will view their income, and that requires becoming familiar with the basics of mortgage lending.
For instance, some professionals, such as the self-employed or straight-commission salesperson, may have a more difficult time getting a loan these days than others. Gone are the days of the no-doc loan, thanks to the abuses of the go-go days.
A stated income loan was available to non-W-2 wage earners in previous years, but today's standards are much more stringent.
According to Winesburg, the self-employed or independent contractor will need a solid two years' earnings history to show.