Many financial advisors, even conservative ones, recommend borrowing as much as you can at today's low interest rates. Today, lenders make it easier than ever to do just that.

Not long ago, lenders limited the amount borrowers could pay for their monthly housing expense (principal, interest, taxes and insurance) to 28 percent to 32 percent of their monthly income. Now, many lenders permit high income-earners to apply as much as 50 percent of their income to their housing expense. This makes it easier for borrowers to qualify for larger mortgages and to buy more expensive houses.

Lenders have also eased up on the amount of cash they require a borrower to contribute to a home purchase. First-time buyers in high-priced markets like San Francisco, Boston and New York City, are often making cash down payments equal to 5 percent of the purchase price, or less. A couple of decades ago, the norm was 20 percent.

House Hunting Tip: An advantage of borrowing as much as you can is that you can take advantage of leverage. Leverage is using someone else's money to buy an investment. The less of your own money you use to buy an investment, the more highly leveraged you are. For example, if you put 5 percent cash down and borrow 95 percent of the purchase price, you'll be more highly leveraged than you would be if you borrowed 80 percent and put 20 percent down.

One reason to consider a highly leveraged purchase is that the profit potential is greater than it would be with a less leveraged purchase. Suppose you buy a home for $350,000 and put 20 percent, or $70,000, down. If the property appreciates 10 percent, it will be worth $385,000. You will have earned $35,000, a 50 percent return on your investment of $70,000. With a 10 percent down payment of $35,000, you earn 100 percent on your investment. The lower down payment yields a higher return. But, if you were to pay all cash, you would earn only 10 percent on your investment.

No Major Purchase of Any Kind

Review the article titled, "Don’t Buy a Car," and apply it to any major purchase that would create debt of any kind. This includes furniture, appliances, electronic equipment, jewelry, vacations, expensive weddings…

…and automobiles, of course.

Don’t Move Money Around

When a lender reviews your loan package for approval, one of the things they are 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 on any of your liquid assets. This includes checking accounts, savings accounts, money market funds, certificates of deposit, stock statements, mutual funds, and even your company 401K and retirement accounts.

If you have been moving money between accounts during that time, there may be large deposits and withdrawals in some of them.

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 cancelled checks, deposit receipts, and other seemingly inconsequential data, which could get quite tedious.

Perhaps you become exasperated at your lender, but they are only doing their job correctly. 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, even if you are consolidating your funds to make it "easier," could make it more difficult for the lender to properly document.

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

Oh…don’t change banks, either.

Should You Change Jobs?

For most people, changing employers will not really affect your ability to qualify for a mortgage loan, especially if you are going to be earning more money. For some homebuyers, however, the effects of changing jobs can be disastrous to your loan application.

Home inspectors are a significant part of all real estate transactions. As a result, home inspectors are in high demand. Due to the explosive growth of the real estate market there are frequent sales of houses, condominiums, buildings, and rental property. To do a proper home inspection you need to be familiar with building construction and operating systems. If you cannot evaluate the true condition of a home or condo, then you could be in for a very high financial loss.

Home buyers and home sellers lose a great deal of money when a thorough, accurate home inspection is not done. Faulty construction, improper electrical wiring, inefficient insulation, old heating or air-conditioning systems, termites, hazardous do-it-yourself home repairs and renovations, building permit violations, and countless other unseen pitfalls lead to very expensive home repairs. An even bigger concern are undetected safety hazards in and around your home.

There are two ways town hall can make you pay more. Your local government can raise the "millage" rate, the number that represents how much you'll owe per thousand dollars of property value. Or they can reassess your property. An assessment is simply the act of placing a value on your home.

There's not much you can do to change the millage rate (short of starting a political movement), but you can fight city hall over an assessment.

"What homeowners often don't know or realize is that this process is a subjective one." says Pete Sepp, spokesman for the National Taxpayers Union. "Essentially, your assessment is one person's opinion about the value of your house."

There may be mistakes, miscalculations or assumptions made by an assessor that cost you money in taxes. Given the fact that assessments can be done from the public right of way, it's no surprise there can be errors. Imagine trying to figure out the value of a home from the street corner.

Sepp says according to figures he's seen, 30 to 60 percent of properties in the U.S. may be over-assessed. If you're like many people with mortgages, you may have your property taxes automatically escrowed, so you're less likely to notice or question changes.

Most homeowners don't even realize they have the right to see their assessment reports -- much less appeal them. If you decide to appeal, chances are pretty good you'll win. Roughly half of the people who take their complaint all the way to an appeals court win some sort of relief.

If you have a house to sell, sell it before selecting a house to buy! I haven't seen a contingent sale work in the last 5 years, unless it's with a new home builder who has other houses to sell and can afford to put one on a contingency.

Let's pretend that we go out looking for the perfect house for you. We find it and you love it! Now you have to go make an offer to the seller. You want the seller to reduce the price and wait until you sell your house. The seller figures that's a risky deal, since he might pass up a buyer who DOESN'T have to sell a house while he's waiting for you. So he says OK, he'll do the contingency but it has to be a full price offer! So you see, you paid more for the house than you could have because of the contingency.

Now you have to sell your existing house, and in a hurry! Otherwise you lose the dream house! So to sell quickly you might take an offer that's lower than if you had more time. The bottom line is that buying before selling might cost you TENS OF THOUSANDS of dollars. I always recommend that you sell first, then buy.

If you're concerned that there's not a house out there for you, then go on a window shopping trip. You can identify possible houses and locations without falling in love with a specific house. If you feel confident after that, then put your house on the market.

Another tactic is to make the sale "subject to seller finding suitable housing". Adding this phrase to the listing means that WHEN YOU DO FIND A BUYER, you will have some time to find the new place. If you don't find anything to your liking, you don't have to sell your present home.

To determine the value of any piece of property, the Property Appraiser must first know what similar properties are selling for, the cost today to replace any improvements on it, how much it takes to operate and keep them in repair, the income it may earn, and many other facts affecting its value, such as the current rate of interest charged for borrowing money to obtain a similar property, either through purchase or construction. Utilizing those facts, the property's value can be determined employing one or more of three different methods.

The first is to find properties like yours which have recently sold. However, their selling prices must be analyzed very carefully to get the true picture. One property may have sold for more than it was really worth because the buyer was in a hurry to occupy it and would pay any price to get in. Another may have sold for less than it was actually worth because the owner needed cash right, away so was willing to sell to the first buyer making an offer. Using this approach - comparing selling prices of properties similar to yours - the Property Appraiser must always consider such over or under pricing to arrive at a fair valuation of your property.

The second is based on how much money it would take, at current material and labor costs, to replace your property with one just like it. If any improvement is not new, the amount of depreciation must also be determined.

The final method is used in addition to the other two if you happen to own property which does, or could, provide an income, such as an apartment complex, retail store space, or office building. In that case, the Property Appraiser must consider such facts as your revenue, operating expense, insurance, maintenance cost, degree of financial risk incurred by owning the property, and finally, the return most people would expect to receive on that kind of property

What An Appraisal Entails

An appraisal is, simply, an "opinion of value" by a professional appraiser who visits the home and inspects the size, condition, quality and function of the home. The appraiser will generate a detailed report and will generally use comparisons to the sale prices of similar homes in the area to determine a value of the home that is being appraised--known as the "subject property. Comparisons can be made to square footage, appearance, amenities and overall condition.

An individual home's value can be adjusted up or down in relation to what properties are actually selling for in the neighborhood. For example, a home with 4 bedrooms will generally carry a higher value than a home--in the same area and in roughly the same condition--with only 3 bedrooms. A home that needs exterior painting will carry a lower value than a similar home that has been recently painted.

Why An Appraisal?

A professional appraisal protects both the lender--so they don't lend too more than a property is worth--as well as they buyer--so they don't PAY too much. If a buyer gets into the heat of the moment and offers a silly (too high) price on a home, the appraisal will often flush it out.

Who Does the Appraisal?

The appraisal will be done by a professional appraiser--in virtually all cases one selected by the lender. Unlike a whole-house inspection, where the buyer should accompany the inspector, buyers rarely are present when an appraisal is done. In most cases, the buyer does not even know the appraisal has been done until after it is completed and is in the lender's hands.