1. Know your score. Pull your credit report and purchase your credit scores. "It's especially critical this year because the government has started cracking down on mortgage lenders offering nonstandard financing," says Chicago-area attorney Diana Brodman Summers, author of "How to Buy Your First Home." A small change in your credit rating can make a big difference in the amount you pay for your home over the life of a loan, or even whether you'll be offered a loan at all.

Do this early because if you find mistakes that lowered your score, you'll need time to correct the record before you apply for financing. And, if you find that your scores are correct, but lower than you expected, you can change your habits, pay down some balances and rack up a few more months of good marks on the record before you obtain financing.

2. Get preapproved for a mortgage. Preapproved, not prequalified. Prequalified simply means you're good for the loan -- if your income, debts, credit and other factors are exactly as you stated and can be documented. In other words, it's more like wishful thinking. Preapproved means these things have already been checked and verified. This is always a good idea in any market, especially now. Along with a lot of housing choices, there are many more selections on the mortgage menu in recent years too, says Tyson. Sorting out the mortgage first will let you concentrate solely on the loan terms, without the added pressure to choose something quickly or risk losing your "dream house." Since you're likely to have more options in terms of properties, this step will also help you narrow the field to only those homes you can truly afford.

3. Determine your dollar limit. Decide how much you want to pay, not just how much you can pay. The maximum for which you qualify isn't automatically the amount you want to spend, says Summers. You may want to buy less house to allow for a future where one of you might want to stay home with the kids or make a career change. "Everyone would like to see you move into a bigger house -- they would get a bigger fee," says Summers. "But that's no good if you're miserable." And if you get overextended and life throws you a curve, like a job loss or family illness, "you have to have a fudge factor," she says.