It would take more than one edition of Homefinder to tell you everything there is to know about financing your home purchase, but for the first-time home buyer, or those who've been out of the market for a while, we offer Home Financing 101. Here's what to do to get a mortgage:

Traditional down payments are 20 percent or more, but there are mortgage programs out there that will get you into a home with less cash down. It'll raise your loan balance, so your monthly payment will be higher, too. When you put down less than 20 percent, add monthly payments of $80 to $100 for private mortgage insurance, or PMI.

Christopher Oquendo/Special (ENLARGE)

Vicky Chastain of Alpharetta got a construction loan that converted to a conventional mortgage once the house was built.

Christopher Oquendo/Special (ENLARGE)

Sam Berry bought a house in Cumming after his office moved. He made a 50 percent down payment.

It's important to put enough down on your home that you'll have equity when it comes time to sell. If you're sure your income will remain steady or grow, and you plan to keep your home for at least five years, a lower down payment may work for you.

Your credit score:

• What is it? A number that ranks the likelihood you will pay your debts.

• Who gets the best rates? Paul Carrier of Blueprint Mortgage Services says, "Someone with a credit score of 700 or above is an 'A borrower' and qualifies for the best [lowest] interest rate."

• Your credit score and your down payment determine the type of loan you'll get.

• The better your credit, the more financing options will be available.

• Get your credit report and talk to your mortgage broker or lender about it. If you find something is wrong, you have time to work on fixing it.

"Before I start showing clients homes — not just physically, but even on the Internet — I give them the names of several mortgage brokers or bankers so they can find out what they can afford," says Ann Ahern, Realtor with ReMax Greater Atlanta.

Carrier says, "Pre-qualifying is just giving you a yardstick. I can't say that based on what you've told me, you are approved for a [particular amount] loan because only the lender makes that determination, but I can help you understand what you're likely to be approved for and that gives you a framework so you can go shopping."

Official preapproval happens when the home buyer pays for a credit report and gives the lender proof of employment, income and other debts. "Then the home buyer gets a preapproval letter for a certain dollar amount, and when we make an offer," Ahern says, "the listing agent gets a copy so they know we've done our homework and my buyer is qualified to buy that house."

Getting pre-qualified for a loan will help with this process. The following outlines some of the things a lender will be taking into consideration in deciding how much you may borrow. That will, in turn, determine what you can pay for a home.

Traditional debt ratio rules of thumb:

• Your house payment should be no more than 28 percent to 30 percent of your income.

• Your house payment plus all of your other monthly time debts (car loans, credit notes, boat loans, student loans, etc.) should be no more than 36 percent to 40 percent of your income.

Carrier says, "These rules of thumb haven't been used so much during the last few years, but with all the problems in the mortgage market, a lot of lenders are going back to the old way in order to bring sanity back to the market."

Other deciding factors:

• How much cash are you bringing to the table to cover your down payment and closing costs?

• How much can you be approved for in monthly mortgage payments? (Don't forget insurance, taxes and homeowner association fees, which may be rolled into your monthly payment.)

Carrier says, "There are so many different products out there that I often joke, 'Tell me you were born on the eighth day of the fifth month under a hazy moon — there's a product for you.' "

Seriously, there are lots of choices, and narrowing them down takes a bit of research and some thinking about what you plan to do once you buy your house. Be careful not to enter into a mortgage with an increasing rate or a balloon payment if your income is not stable. Fixed-rate mortgages are the safest bet because the payment of principal and interest never changes.

If you plan to stay in your house for more than a few years:

Fixed-rate mortgages:

• Have different lengths of time a mortgage can be outstanding — 10, 15, 20 or 30 years.

• Keep the same interest rate for the life of the loan. Rates are generally lower the shorter the term.

• Payment amount only varies if your taxes or insurance rates change.

• Current interest rates: 30-year fixed at 6 to 6.25 percent for an A borrower. (Interest rates fluctuate every day.)

Certain to sell your home within a few years:

Adjustable-rate mortgages, or ARMs:

• Have different terms; for example, a 5/1 ARM means the initial interest rate is locked for five years and on the sixth year, the rate will adjust to the margin, which is determined by each lender.

• Usually have a rate cap.

• Current interest rates: 5/1 ARMs are currently at 5.75 percent to 6 percent for an A borrower. (Interest rates fluctuate daily.)

• If you pay more than the required payment, the additional money goes toward the principal and automatically lowers your payment.

For more information, check out:

• www.bankrate.com and click on Mortgage

• www.fdic.com and click on Consumers and Communities

• www.suntrustmortgage.com

• www.home-mortgage-calculator.net

Check for prepayment penalties:

If you sell your house and pay off your mortgage in the first one to three years, you might find that your mortgage came with a prepayment penalty. Carrier says, "The interest rate may be lower in a mortgage with prepayment penalties, but if relocation is a possibility, you probably don't want to take that mortgage." Tina Grady, with SunTrust Mortgage, answers, "If you want to refinance for a better rate or get a cash-out and there's a prepayment penalty in your mortgage, it will cost you 1 or 2 percent to make that change. You might be better off just waiting it out."

CAN I BUY A HOUSE FOR $365,000?

The answer is yes if:

• You are a borrower with "A" credit

• An income of $6,008 per month (that's two wage earners making metro Atlanta's average monthly wage of $3,004) or more

• Monthly time payments (car loans, credit cards) of $600 or less*

• Available cash for a 20 percent down payment and closing costs

• With a 30-year fixed rate loan at 6.25 percent

You can afford a house payment of 30 percent of your income, or $1,800. That would qualify you for a loan of $292,000.

*Every dollar of time payment debt over $600 reduces dollar-for-dollar the amount of the mortgage payment you would qualify for. If your credit rating is lower, the interest rate would be higher. If you have a smaller down payment, the loan amount and payment would be higher, so your income would have to be higher, too.

These are fees paid at closing that cover a wide range of items such as attorney fees, title service costs, points, and appraisal and inspection fees. Some are based on a percentage of the sale price, and some are fixed. They can vary from 2 percent to 4 percent of the amount of your loan. Your lender will supply a Good Faith Estimate of the costs, but remember, it's just an estimate. All these costs must be covered at the closing in cash. You may be able to negotiate with the seller to pay some of these costs.

Now that you know what you can afford and how to go about getting that all-important loan, GO FIND YOUR DREAM HOUSE.

A BIRTHDAY IN A NEW HOME

Sam Berry's office moved from downtown Atlanta to Cumming. Suddenly faced with an hour-and-a-half to two-hour commute, he was ready to find a new home. When he and Realtor Ann Ahern started looking, they drove up to one that was almost identical to the one he was selling but much closer to work. Finding the house proved to be serendipity; planning for the mortgage involved a little more work. "It was 23 years since I bought my last house, so it was almost like being a first-time homeowner," says Berry.

Original list price: $240,000

List price when he found it: $219,000 (It had been on the market for a while.)

What he paid: $203,000 (They negotiated the price down as the inspection found issues.)

Closed: June 2006 (They closed on Berry's birthday.)

His mortgage: 30 years at 6.6 percent

His down payment: 50 percent

Monthly mortgage payment: $758.82

Additional cost of taxes and insurance, amortized monthly: $192 (Because of his large down payment, he does not have to put that money into escrow.)

Why: "I could have done other things with that down payment money, and my mortgage broker talked to me about that, but I wanted to control my payment. I'm happy with my decision."

BUILDING EQUITY

Vicky Chastain just finished building a two-story Country English house with a covered porch, four bedrooms, 3 1/2 baths, and a finished basement with a bedroom, full bath and kitchen. She got a construction loan for the building, then when the house was done, closed on a conventional mortgage. Now she's looking to refinance.

Construction loan: $720,000 loan, interest only, 7 percent

Down payment: 10 percent

How construction loans work: The landowner is paid, and the rest of the mortgage goes into a draw account. The lender's inspector comes out at specified stages to be sure the work is done properly, then more funds can be released to the builder. Once the house is built, the loan is converted to a conventional mortgage.

Closed: May 2007

Conventional mortgage: An interest-only 5/1 ARM at 6.5 percent

Monthly mortgage payment: $4,133.68

Rising property values: By the time the house was built, it had already increased in value enough that she doesn't have to pay for PMI, but her payment does include taxes and insurance.

Plans to refinance: "I'm thinking I can find a better deal. I hope this will be a five-year investment and then I can retire on my profit," says Chastain.