I've purchased 4 homes in my lifetime. I lived in about 30ish odd apartments/condos. Here is the scoop.
I agree with everything pliskin has said and I'll go over some things.
With the new rules of the government, they have more strict guidelines now for buying a house. Don't let that scare you, but they don't want $ in the hands of criminals (which is a very smart idea and should had done this a long time ago), thus here is a guidline of some of their new rules.
You have to show where your downpayment has came from. Reason why is because they don't want drug money buying a house. Start today with having a direct deposit if you don't already. Banks need to track this income. If you sell a car for say $1000 bucks, make sure to get a bill of sale or something to show proof where you got that money.
Also, they check back three months to show that you had that money in there and is stable. Meaning that you don't blow it all at once until next payday. They take a median average of the three months and decide that this is what you live on, therefore a underwriter at the bank sees that you are responsible.
Be sure to not use credit cards. IMO credit cards are evil (trust me, they about ruined me). Others that are responsible have no issues. If you don't have any credit, then get a gas card and pay it BEFORE the bill comes out. Wait a few months and your credit score will be high. After you get the house, cut the card in half. Your monthly payments on your new home will build your credit up as long as you are on time with your payments. Be sure that you pay your payments a month ahead of time (think of being in the hospital for a month and no way to gather payments).
Check bankrate.com for the latest APR's out there. Right now a 30 year fixed is 3.95%. When they say "Fixed" they mean that your payment will not go up. This is very important so that your house payment wont go from $275 one month to $475 the next. Stay away from "Balloon rates", "adjustable rates" "Jumbo", "ARM" rates. These typeo of rates "adjust" like I just said. The number of foreclousers (can't afford the house and go bankrupt) are from these types of loans.
Go to your local bank, not a bank that is in a different city. Go to one of the local branch offices. Stay in their face (thats what they are there for and their business is to provide loans). Ask tons of questions. If they say you can get this or that rate with "points down" and you don't know what points mean, ask the question.
More than likely you will get a FHA loan (First time homebuyer), which is a great loan with speical discounts and less strict guidelines. Read up about FHA loans. Mainly they are for low income (less than a 100k house). It will be your only chance of getting this the first time around because if you buy a second home in the future, you will not be eligible for a FHA. Thus the benefits of a FHA are very good for first time homebuyers.
If you go with a 30 year fixed, which I recommend, then don't let people talk you into a 15 year. Reason why? Because a 30 year payment will be half of that of a 15 year. Yes, you will get a better rate with the 15 year, but your payment will be higher. You will have less interest build with a 15 year also. For example, if you get a 40k house, with a 30 year fixed, then you will be paying over the 30 years interest of around $21k on it. So your 40k house will really cost you 61k when you are done with the loan. With the 15 year fixed your interest paid will only be 10k, so your 40k house will only be 50k when you are done. Your question will be "why not get a 15 year?" Because of two things. #1. A 30 year payment will be 142/month. A 15 year will be $221/month. IF you get in a bind, then that extra money will be there and you won't be stressed for making the extra up. Also, you can control your 30 year rate by making extra payments on the "principal" of the loan. This means that if you pay your monthy 142, add an extra 100 bucks on it and you will pay it off in 13 years instead of 30!!!! So you see why I recommend a 30? If you do make extra "principle" payments, then make sure you tell the bank or write it on your slip "100 extra for principle", otherwise they will just add it to the "interest" which is a crazy thing and they way they make money! They want people to drag it out 30 years because the bank makes more money that way. Two things to remember about a bank home loan, there is a "principle" and there is a "interest". The principle is the original ammount of the loan. In this case it was 40k. The interest was the 21k.
Now, for finding a home. Look on realtor.com and craigslist. Before I get to this part, I would go with what Pliskin said about going to the bank to see how much you can get. When they tell you "how much you can get", don't assume you HAVE to get that ammount. Thats the cap they give you and trust me its hard. If they say you can get a 50k house tops, then figure you will be buying a 30 or 40k house. The trick is to find a 60k house and talk them down to 40k. Yes, they do go down and if they don't then walk away. I've done this tons of times. Don't make offers on homes in writing until all your fact are in place, and you have throughly looked over the home. I'll go into that more when you get the first part done (bank). Don't choose a real esate person as of yet because I have tips that you can go in and get the house cheaper. For instance 99% of the real estate brokers say their commission is 6%. Thats bullhocky! I tell 4 or 5% if they want me as their client. Think about this... You are THEIR boss! They provide a service for YOU! Thus you tell THEM what you will pay them. Very important.
Ok, there is tons more of stuff and I can help you with. Tell me your steps as you go and if there is anything private you want to discuss please pm me.
Good luck with the bank. Ask any question on here like 'whats this or whats that with APR's etc. We'll answer them.
Forgot to say, go to this link to figure how much your house payment will be. Its dead on. You have to know what your APR is going to be so go to bankrate first to get the "daily" APRs that are out there. It goes up or down depending on the economy so I always put a point or two on it to be on the safe side. For instance it is 3.95% today. Tomorrow it can be 4.00% Put 4.00% in the calculator.
Dave Ramsey's mortgage calculator: click the launch calculator for it. BTW, I would actually get his book (10 bucks) and read it first before buying a home. Very simple easy to understand stuff explained in 8 "baby steps". I highly highly recommend this book first before thinking about a home.
http://www.daveramsey.com/article/mortg ... realestate