With the recent fall in housing prices and the record low interest rates, buying a house has never been more affordable. However, in today's market buying a home requires careful saving and planning. In order to qualify to buy a home, you need to make sure your expectations meet the current market. Make sure to avoid these ten common pitfalls that can keep you from buying a home:

You Have Large Cash Deposits without a Paper Trail
When applying for a home loan, you will need to be able to source all cash deposits that are applied to your bank account. If you are doing any side jobs or receive cash from friends or family, if will need to be sourced.

Gift Money or Down Payment without a Source
If you are getting funds from your parents to purchase a house they will need to include a signed letter stating that the money is a gift and a bank statement that shows their ability to gift the funds.

You Have a Debt-to-Income Ratio Higher than 45%
Your debt-to-income ratio (DTI) is calculated by adding the amount of money that a new monthly mortgage payment would be with the other recurring monthly debt that you have and dividing it by your monthly income. The majority of all loan programs require that your DTI is less than 45 percent.

Self-Employed with Losses on your Schedule C
If you file your income taxes on a Schedule C, it must show strong positive figures on Line 31 net profit, Line 12 depletion and Line 13 depreciation. If you show losses in these areas, you will unlikely qualify for the maximum house price.

2106 of Business Expenses on your Tax Return
Lenders calculate business expenses as a debt and will add that into your monthly debt-to-income ratio.

You Need a Seller Credit to Make Closing Costs
If you are short on cash and are relying on the seller to credit the closing costs, you are at risk if the seller doesn't agree. You need to be prepared to pay approximately 3 percent of the purchase price in closing costs. The closing cost would be in addition to the down payment.

You're Reluctant to Make Decisions
In the ideal home purchase scenario, you would shop for a loan and get pre-approved before beginning your home search. If you make an offer on a home before you choose which lender or loan program you are going to use for funding the home, you will be forced to drop out of the contract.

The Home has Structural or Pest-Related Issues
You will find out is the home has any structural or pest-related issues with a home inspection. If you are getting your mortgage through a government funded loan, you will have to meet higher appraisal standards. This can prevent you from qualifying if the home ends up having any of these issues.

The Home has Multiple Offers
If you are competing for the home with multiple offers you have the risk of losing out, especially if there are stronger buyers. If you can get your lender to close the loan in less than 30 days it can give you the upper hand in negotiation. So, if you are faced with a bidding war, ask your lender if you can close faster.

You Have Unrealistic Expectations
If you have a long list of must-haves, but a limited budget, often times you are going to have to make compromises in your home. Often time's buyers will put in multiple offers on homes and still lose out, because the house is valued at much more. Look to your real estate agent for help determining what a fair offer is.

If you would like to talk to an expert today about your home purchase, please call us at (858) 605-0952 or visit our website at www.prospectfgi.com to request a quote!