Preparation Before you start shopping for your dream home, it's a good idea to make some preparations.

Build Your Green File A green file contains all your important financial documents. You'll need it to secure financing for your home. The typical green file should contain: Financial statements Bank accounts Investments Credit cards Auto loans Recent pay stubs Tax returns for two years Copies of leases for investment properties 401K statements, life insurance, stocks, bonds, and mutual account information

Check Your Credit Rating Your credit score will have a huge impact on what type of home you can buy, and at what price. Anything above 620 is considered good. A premium interest rate may mean a lower interest rate on your mortgage. Check your credit rating with a credit reporting agency such as Equifax , Experian or Trans Union.

Be Careful With Your Finances Now is not a good time to make sudden career changes or large purchases. You want to approach your property purchase from a position of financial stability.