Each month stash the home's cost, including mortgage, property taxes, insurance and maintenance, into a money-market account if you plan to buy in a year or two, or equity funds if not for a few years, says Michael Boone, a financial adviser in Bellevue, Wash. You'll quickly know whether you can afford the house. Plus, you'll build a down payment.

In the end, spend no more than 2 1/2 times your income on a home. For a down payment, it's best to come up with at least 20%. Make a smaller down payment, and most lenders will require you to have private mortgage insurance (PMI), which adds a minimum 0.5% of the loan amount to your mortgage payments, about $1,000 more a year on a $200,000 principal.