You may be thinking, “Don't I find the house first and then think about the mortgage?” Actually, that would be working backward. If you do not know, within a certain range, how much house or condo you can afford and how you plan to pay for it, how can you know to narrow down your search to certain homes? And once you find a home you like, how can you negotiate the price without knowing what you can afford?

Table 4.1 Type of Mortgage

Source: National Association of Realtors Profile of Buyers and Sellers 2007