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Boost your savings
Some lenders offer 100% financing, however, you should still save enough for at least a minimal down payment. Also, when calculating how much you can afford to spend each month, don’t forget other home-related expenses like property taxes, homeowner’s insurance, private mortgage insurance (if required), repairs, and utilities. Some experts suggest allocating up to an extra 40 percent of your monthly mortgage payment in your budget for related expenses.
Develop a budget
Step one to meeting any long-term savings goal is to create a detailed budget, so you know exactly what's coming in, what's going out, how much you need to save, and how long it will take. It may help to consult a financial advisor for questions about your particular situation and how different mortgage options could affect your bottom line.
Improve your credit score
Even with thousands of dollars saved for a down payment, you may find it's difficult to qualify for a mortgage if you can't demonstrate a solid track record of obtaining and paying loans— or worse, if you have a history of late payments or exceeding credit card limits.
The three major credit bureaus— Equifax, Experian and TransUnion track your credit history and use the information to compile credit reports. This credit history is also used to create three-digit credit scores that lenders use to determine whether you're a suitable credit risk. Poor scores could either prevent you from qualifying for a mortgage or dramatically increase the interest rate you'd have to pay.
To know where you stand, order your credit reports and review them carefully for errors or fraudulent activity. You can order one free credit report per year from each bureau through www.annualcreditreport.com. If you go through the credit bureaus' own sites, you'll be charged a small fee.