To score the best mortgage deal, it's important that your finances are in top shape. This is especially true for first-time homebuyers. They may have a more limited financial history, and could receive a higher interest rate as a result.

So how do you know when you are in a position to purchase a home? Kiplinger has some tips on a few indicators.

1. You have a healthy budget

Owning a home comes with many financial obligations. If you have only rented property in the past, these added costs might be a surprise. However, if you have a good track record with handling money, the transition could be easier.

In the past, you may have only had to deal with monthly rental payments and utilities. When you own a home, you still need to make monthly payments, but you also need to account for insurance, property taxes and maintenance costs.

Knowing exactly where all your money is coming from and where it is going can help determine how much you can afford each month.

2. You have money in the bank

One of the hardest parts of buying a home is saving for a down payment. Many lenders require 20 percent of the property's value up front. However, depending on your credit score, certain options, such as FHA mortgage loans, could require less.

The more money you save for a down payment, the better loan terms you may receive.

Additionally, it helps to have money to pay for closing costs. These tend to range between 3 and 6 percent of a home's value. While this may not seem like very much compared to a down payment, it is important to budget for this expense.

3. Consider your employment status

Buying a home is a long-term financial commitment. For this reason, you need to have job security. This way you can be sure to make monthly payments.

If you are in school, plan to leave your job or only have a temporary position, you need to consider the future of your cash flow.

Additionally, if your household currently has two incomes, this could make it easier to purchase a home. However, if you plan to have children, which could require one of you to stop working, this could be a major shock to your finances.

4. Monitor your credit

Lenders use your credit score to determine how good you are at managing debt. If you have a weak score or short credit history, this could result in a higher mortgage rate.

Before you apply for a home loan, make sure to request a copy of your credit report to determine your financial situation. Under federal law, you can receive one free annual copy from each of the major credit reporting bureaus. These include TransUnion, Experian and Equifax. If you look and find any errors, dispute them immediately. The sooner, you get this cleared up, the better.

However, if you do not find any mistakes, but still want to improve your standing, there are additional steps to take. For example, try to pay down other debts, such as student and auto loans as well as credit card balances. This can improve your debt-to-income ratio and help qualify for better mortgage terms.

Qualifying for a home loan is a major step in your personal finances. Shilo Zitting and The Z Mortgage Team are here to keep you up-to-date on the latest tips and tricks of the mortgage industry whether you're looking to improve your home value or simply make a mortgage rate comparison.