Saving vs. pinching. If you're like most Americans, you save less than 5% of what you earn after taxes. But the more you save, the bigger your down payment can be, which in turn can mean lower monthly mortgage payments. Besides, if you're not used to saving now, your finances will really feel pinched after you buy your home, making it even harder to save for retirement and other financial goals.

Keep your credit in check. Now is not the time to run out and make a major credit purchase, like a new car or a fancy home entertainment system. The loan you take out will lower the amount of the mortgage you can qualify for. Applying for more credit is also unwise.

New vs. existing. You can make a case for either one. Here are a few quick pros and cons. A new home—built from the ground up with no previous owners—is typically more expensive to buy, but cheaper to maintain than a home that someone else has lived in. New homes are built to updated government codes and built for modern demands, with bigger closets and ample electrical outlets that some older homes lack. However, they're sometimes located far away from a community's center (which may be a plus to you), and there might be expensive homeowners dues. Existing homes, on the other hand, are usually found in more mature neighborhoods, where it's (presumably) easier to predict the area's future. Window treatments, lighting, decks, and landscaping are already in place, though sometimes design "flaws" are also built in, such as too few bathrooms or a miniscule kitchen.

Good timing can help. If possible, look for a home when the real estate market is going through a stagnant period, like around the December holidays. During these slower times, you can increase the chance of finding a seller who is more motivated to sell, and decrease the chance of other buyers competing with you for the same house.

Improving vs. maintaining. As a general rule, you can plan on spending from 1% to 3% of the purchase price on annual upkeep. Such maintenance and repairs include patching the roof, painting the bathroom, or hiring someone to mow the grass. These expenses differ from "improvements" which have a more permanent effect on your home. Installing a new roof, renovating a bathroom or landscaping the yard is an improvement. Be sure to save those improvement receipts for tax purposes.