Buying a home isn't a decision people make overnight. There is usually a warm-up period, when a family's current house or apartment begins to feel too small or they lament the lack of a yard or the length of their commutes. Sometimes an event -- a positive pregnancy test, the birth of a baby or getting a dog -- precipitates a sudden interest in getting a new house. In other cases, a new job or promotion makes the dream of home ownership seem possible.

Around this time, prospective buyers find themselves studying advertisements for new developments and driving around neighborhoods on their days off. This period of "window shopping" might last months or years. This is when spouses take long walks and tell each other all they'd like in a house -- an extra room for a home gym, a swimming pool, a screened-in porch, good schools nearby. The list goes on and on.

Things start to get real when the prospective buyers contact a loan officer to get prequalified for a mortgage loan. Based on income and the amount of money the buyers have saved for their down payment, the loan officer crunches the numbers (by telephone, in person, or even over the Internet) and then gives a home price the buyers can afford.

Sometimes the mortgage loan officer says, "If only you didn't have this car payment."

A little bit of financial savvy goes a long way in the mortgage process. Knowing what not to do right before applying for a home loan can be almost as important as the long term saving you've done to build up a down payment.

When determining a buyer's ability to qualify for a mortgage, a lender looks at the applicant's "debt-to-income" ratio. A debt-to-income ratio is the percentage of gross monthly income (before taxes) that is spent on debt. This will include monthly housing costs, including rent -- or if you already own a home, principal, interest, taxes, insurance, and homeowner's association fees. It also will include monthly consumer debt, including credit cards, student loans, installment debt, and car payments.

To make your income-to-debt-ratio as favorable as possible, avoid buying a car or making other large purchases such as furniture or electronic equipment using credit before you apply for a home loan. Even if you feel you can afford to buy a house and pay your payment on these items, mortgage companies approve mortgages based on their guidelines, not yours.

"Some people can buy anything they want, any time they want. But if a person thinks their budget is tight, they don't want to do anything to make it even tighter right before their purchase of a home," said Vincent Sturkie, president of Hilton Head Mortgage.

Sturkie also said that consolidating credit cards usually isn't a good idea if you're planning to buy a house, because "when you go over 50 percent of your available credit on any one card, it affects your credit rating in a negative way."

For most people, changing employers will not really affect their ability to qualify for a mortgage loan, especially if they are going to be earning more money. If you are a salaried employee who doesn't earn additional income from commissions, bonuses, or over-time, switching employers should not create a problem. For some homebuyers, however, the effects of changing jobs can be disastrous to a loan application.

If you are considering a change to self-employment before buying a new home, don't do it, Sturkie said. Buy the home first.

"A big problem a lot of people have is they'll start a business and a year later apply for a home loan," Sturkie said. "Most mortgage lenders require two years of self employment."

If you are considering changing your business from a sole proprietorship to a partnership or corporation, you should also delay that until you purchase your new home, mortgage lenders say.

If a substantial portion of your income is derived from commissions, you should not change jobs before buying a home. This has to do with how mortgage lenders calculate your income. They average your commissions over the last two years.

Changing employers creates an uncertainty about your future earnings from commissions.

If a substantial portion of your income at your new job will come from bonuses, you might want to consider delaying an employment change. Mortgage lenders rarely will consider future bonuses as income unless you have been on the same job for two years and have a track record of receiving those bonuses.

When a lender reviews your loan package for approval, one of the things he or she is concerned about is the source of funds for your down payment and closing costs. Most likely, you will be asked to provide statements for the last two or three months for you checking accounts, savings accounts, money market funds, certificates of deposit, stock statements, mutual funds, and even your company 401(k) and retirement accounts.

Mortgage lenders need you to have cash equal to two or three months of the mortgage payment in your bank account (called reserves), Sturkie said. The lender must know what the source of these funds is and the money must be "seasoned" (have been in the account) for 60 days, he said.

To ensure quality control and eliminate potential fraud, it is a requirement on most loans to completely document the source of all funds. Moving your money around between accounts, even if you are consolidating your funds to make it "easier," could make it more difficult for the lender to properly document. The mortgage underwriter (the person who actually approves your loan) will probably require a complete paper trail of all the withdrawals and deposits. You may be required to produce canceled checks, deposit receipts, and other seemingly inconsequential data, which could get tedious.

So leave your money where it is until you talk to a loan officer.

Sturkie added that the down payment for an investment property can't come from a gift. Regulations established by financial institutions Fannie Mae and Freddie Mac do allow gift funds to be used for the down payment on a primary residence.

"Gift funds are designed to help first-time homebuyers get a little help from mom and dad," he said.

Sturkie added that while most prospective homebuyers who he sees have a good idea of the monthly mortgage payment they can afford, first time homebuyers often have trouble finding homes in their price range in our area.