Congratulations on deciding to purchase a new home! The home buying process is often exciting but sometimes overwhelming for new homeowners. If you've been dreaming of picket fences and stainless steel kitchens but aren't sure where to start, don't worry. Following a step-by-step guide and choosing an experienced buyer's agent will help you find your new home in no time.

1. Get Your Finances in Order

Before you start looking for a house, you need a strong understanding of your finances. First, check your credit report through all three major reporting agencies. Scores are based on your payment history, whether you have past due debt, how long you've had a credit history, the types of accounts you have, and whether you've recently applied for new credit. To qualify for a traditional loan with a low interest rate, you'll need a score of at least 720. If you plan to use an FHA loan, your score typically only needs to be 580 or higher.

Once you know which type of loan you qualify for, you can decide your budget. A good rule of thumb is to assume you can afford a home that costs 2-3 times what you make in a year. If you make $100,000 a year, look for a home that is $300,000 or less. Experts recommend not taking out a mortgage that costs more than 28% of your monthly income and paying at least 20% toward the down payment (save another 3% for closing costs).

Next, search for the right mortgage. If you can, go with one of the most common types. The interest rate on a fixed-rate mortgage stays the same for the entirety of your loan and is the best choice if you plan to stay in the home for more than a decade. When you find a reputable lender that provides the type of mortgage you want, apply for pre-approval. If approved, the lender gives you a letter that states how much it would be willing to let you borrow. You do not need to use this lender when you officially apply for a mortgage, though.

2. Decide What You Need and Want in a Home

Before you start your home search, create a list of everything the "perfect" house would have. Think about the number of bedrooms and bathrooms, how close you want it to be to work or schools, and which neighborhoods you'd consider. A well-decorated home and a nice yard sounds great, but they're things you can add to the home at a later date. Take your list with you as you start looking. Use online websites to begin your search and to tell if your budget and your must-haves are in sync with each other. 

3. Find the Right Real Estate Agent

Find a real estate agent when you're ready to attend open houses. Remember, only a licensed agent can help you broker a deal. For example, if you're buying a home in New York, your realtor must have passed the New York real estate salesperson course. You'll be working with this person closely until you close on your home, so research first.

Meet with several agents and ask questions. Is your agent an experienced negotiator? Will he complete paperwork on time and follow through on inspections and repairs prior to closing? Will he help you through the closing process? A good real estate agent will do all of this as well as provide you access to homes you may not have even realized was on the market. Before making your decision, verify his license and ask for references or read online reviews to ensure a history of excellent service.

Remember, don't rush the process of purchasing a home. Maybe you feel the first one you saw was perfect, but what if you see another perfect one tomorrow? View at least a few homes and ensure you make informed decisions before signing on the dotted line.