It’s the American Dream — a home in a good neighborhood with a white picket fence and two and a half kids. Unfortunately, buying a house is expensive and potentially difficult unless you have perfect Credit to qualify for a mortgage loan.

So how can you save money if you’re working on buying your first house?

Fix Your Credit First

Your mortgage payment and interest rate will depend heavily on your current credit rating. If you have a lot of defaulted or maxed out credit cards or a history of loans, you’ll have a greater challenge qualifying for a mortgage loan.

Start by taking care of your debt. Pay down your credit card balances. You don’t have to close the cards out entirely, but 35 percent of your credit score revolves around the ratio of your credit cards to credit limit used. Professionals recommend keeping your credit cards below 15 percent of your credit limit to improve your score. If you don’t have a credit card, get one — having a credit card account in good standing can do wonders for your rating.

If you can’t qualify for a traditional card, consider a secured card. These require you to pay a deposit equal to your credit limit. After a set amount of time and plenty of on-time payments, the card will become unsecured, and the company will refund your deposit.

Save For Your Down Payment

You can expect to pay about 20 percent of the cost of your home up-front as a down payment. If you don’t have the funds for this payment, you will have to spring for private mortgage insurance. Doing so protects the lender — if you default on the loan, the insurance pays the balance — but it is expensive, costing you between 0.5 and one percent of the loan balance.

You can save money and avoid the need for mortgage insurance completely by merely having the cash on hand to make your down payment. Keep in mind the more you put down, the smaller monthly mortgage payments you’ll have.

Shop Around For Mortgage Rates

Like most things, not all mortgages are created equal. If you’re trying to find ways to save money on your home buying journey, shopping around at different mortgage lenders is a fantastic plan. Mortgage lenders won’t be offended if you decide to shop around — many people do because the first lender you visit might not offer you the best rates for your situation.

Keep in mind that by law lenders are required to give you a ‘Good Faith Estimate’ — a piece of paper that outlines all of your potential costs as well as the terms of the loan — within three days of receiving your application. Collecting a few of these estimates from local lenders can make it easier to make the best choice for you.

Don’t Forget About Home Equity

Buying a home doesn’t only give you somewhere to put down roots — it’s an investment you can later borrow against if needed. Paying off your mortgage, a little at a time, helps you generate equity or value. You can borrow against this equity for everything from home repairs, remodeling or cover unexpected medical expenses. There are two ways you can utilize your home’s equity — directly, through a home equity loan, or indirectly through the use of a home equity line of credit, or HELOC.

What differentiates a home equity loan from a HELOC is how you’re given the money. You receive a loan as one lump sum that you pay back slowly over time. A HELOC works more like a credit card — you have a set amount that you can utilize like a spending limit on a credit card, and once that is paid back you can use it again.

Start the Planning Process

Buying a home is an expensive endeavor, but one that is worth it. Don’t rush through the process — shop around to make sure you receive the best mortgage rate possible. Make sure you have enough money for your down payment squirreled away so you can avoid mortgage insurance. Once you’ve signed on the dotted line, you can focus on building equity that you can use in the coming years.

Scott Huntington is a writer from central Pennsylvania. He enjoys working on his home and garden with his wife and 2 kids. Follow him on Twitter @SMHuntington