Before you start shopping for your dream home, it's a good idea to make some preparations.

2.1 Build your 'Green File'. A green file contains all your important financial documents. You'll need it to secure financing for your home. The typical green file should contain:

2.2 Check your credit rating. Your credit score will have a huge impact on what type of home you can buy, and at what price. Anything above 620 is considered good. A premium credit score may mean a lower interest rate on your mortgage. Check your credit rating with a credit reporting agency such as Equifax , Experian or Trans Union.

2.3 Be Careful With Your Finances. Now is not a good time to make sudden career changes or large purchases. You want to approach home buying from a position of financial stability.