With a housing market recovery barely a blip on the distant horizon, and with mortgage rates near historic lows, many feel that now is the perfect time to buy. You can get a great deal on a home right now, whether you are buying a newly built home, and existing home, or a foreclosure. However, as you prepare to buy a home, it is important to avoid the following 3 common mortgage mistakes:

1. Failing to Check Your Credit

The first thing you need to do before you start shopping around for a home is to check your credit. You are entitled to one free credit report each year from each of the three major credit bureaus. Go through your credit report to make sure that everything is accurate. Since your credit score — and mortgage lenders care about that — is based on the information in your credit report, you need to make sure it’s all correct.

On top of that, you should check you credit score. You will have to pay to access your FICO score from myFICO.com, but it may be worth it if you want to be prepared for your credit. You don’t want to find out about problems when you apply for a mortgage; find out ahead of time so that you know what to work on, and can make the effort to improve your credit situation ahead of time. You should also be aware that some lenders are using the FICO 8 mortgage score which is a new credit score lenders are using to help adjust for risk.

Mortgage lenders are strict about standards right now, and you could end up being denied. Even if you aren’t, having a score that is “only” good can mean you miss out on the best mortgage rate. If you are determined to buy a house with a mortgage rate that isn’t the lowest, you may still be able to refinance in the future. Having a mortgage can help your credit score improve as long as you make regular, on-time payments.

2. Buying Too Much House

This is less of an issue now, but it can still be tempting to reach to afford a bigger home. Just because you have been approved for a larger home loan doesn’t mean that you should buy it. Many people buy bigger homes just because they feel like they can afford it. However, what happens later on?

Carefully evaluate your needs as a family. When we were looking, we were approved for a mortgage in the amount of more than twice what we ended up going with. Our family doesn’t need a bigger house just to have a bigger house. It can also be tempting to follow the “30% rule” by only considering the mortgage payment, and forgetting to include other housing costs, including utilities, property taxes, maintenance and repairs. You might find yourself “house poor,” unable to enjoy other activities because so much of your monthly income is going to pay for housing costs.

Don’t be tempted to get a bigger house just because a lender tells you can afford it. Consider your needs, and your financial comfort, before making the decision.

3. Choosing the Wrong Loan

Once you settle on an appropriate amount to borrow, it’s time to choose a mortgage. You should think about your needs, and your finances, as you choose a mortgage. There are a number of options when it comes to mortgage loans: ARMs, fixed rate loans, 30-year loans, 15-year loans and other options. Make sure you read the fine print, and you understand how variable rates are set, and ask that your loan have no prepayment penalties. Think about whether you want to pay off your mortgage early, or whether it would be better for your cash flow to stretch it out. The wrong loan can become a real burden three to five years in the future — as many people discovered in 2007 and 2008.

What other mortgage mistakes can lead to financial problems?