Hunting for the house of your dreams can be exhilarating. Unfortunately, hunting for the home loan of your dream is not nearly as exciting. The following advice can help you avoid problems.

1. The time to address your credit report is when you first start thinking about buying a home. Don't wait until the process is underway. If you need to fix something on your report, it can take a couple of months.

2. In the old days, it took weeks to get approved for a mortgage. Many lenders now use a software program to determine if they will give you a loan. If your credit is in good shape, it can take as little as three days for approval.

3. Some adjustable rate mortgages tie their interest rates to the COFI index. COFI stands for 11th District Cost of Funds Index. It is a monetary correlation of money transactions for banks in California, Arizona and Nevada.

4. To make sure the rates don't change after a lender approves your mortgage, you can lock in the loan by paying a fee. This does not lock you into the loan, only the lender. If you subsequently find a better deal with another lender, take it!

5. If you pay points on your mortgage, try not to wrap it into the mortgage. If you write a separate check from your personal account, you can deduct the full points on your taxes.

6. Should you go with a fixed or adjustable rate mortgage? In general, go with fixed when rates are low and an adjustable when rates are high.

7. This mortgage program involves a loan for 125 percent of the home value. It is used as a way to cash out a property if you expect significant appreciation over the near future. This is a very dangerous loan because if appreciation does not occur, you can get into significant trouble with negative amortization.

8. The first step to finding a mortgage is to find a lender. You might be surprised to learn that a majority of lenders do not deal directly with the public! So, how are you supposed to find them? The answer is to use mortgage brokers.

9. Don't assume anything about your credit. Before you apply for a mortgage, check all three credit agencies. Congress has determined that 50 percent of the negative marks on most people's credit are errors.

10. When determining the interest rate on an adjustable mortgage, some banks use the Prime Rate. This rate represents the top rate banks give their best clients when lending them money.

Applying for a mortgage can be a bit intimidating. You financial soul is stripped bare. That being said, don't get to stressed. Millions of borrowers are approved and you probably are more qualified than many of them.