Owning a home is a dream for many Americans. But what should you know before taking on this huge commitment?

"Choosing to buy a home is both a lifestyle and financial decision," says Jennifer Sorette, a mortgage loan originator with Fifth Third Bank. "From a financial perspective, there are many important things to consider. For example, it's very important for people to know what they can afford. It's also helpful for them to know what their out-of-pocket costs will be when they close the deal."

Establish your price range
Before house hunting in earnest, Sorette advises people to look closely at their budget and determine how much mortgage they'd feel comfortable paying each month. "Once I have this information, I'm able to advise them on how much house those payments can buy," she says.

"It's important for people to know up front whether they can afford the type of house they imagine living in," Sorette continues. "Occasionally people discover their wish list exceeds their budget, in which case they may decide to postpone a purchase or lower their expectations."

When budgeting, she advises people to compare their gross monthly income (before deductions) with their monthly bills. "For most people, a good rule of thumb is to spend no more than 33 percent of their monthly income on their mortgage payments - or no more than 25 percent if they have student loans, car payments or significant credit card bills," she says.

Sorette encourages people to get pre-approved for a mortgage before enlisting the help of a realtor. "Today, most realtors want to see a pre-approval letter from a lender before they invest a lot of their time in showing homes."

Know your out-of-pocket costs
What does it cost to get into a house? According to Sorette, not as much as you might think: "I always outline these costs for potential buyers ahead of time. For example, they can expect to pay for one year of homeowners insurance as well as fees for a house inspection."

What about closing costs and a down payment? "Some people negotiate for the seller to pay for closing costs," says Sorette. "And today, making a down payment is not required. At Fifth Third, we have 14 different mortgage options with zero percent down. Many people aim to make a 20 percent down payment to avoid the expense of private mortgage insurance (PMI). But today, we waive that fee when people have a high credit score, of at least 680, and we offer other options for people with scores below 680. Also, PMI may be tax-deductible for families who make less than $100,000 a year."

Other things to consider
People generally have the option of choosing the term of their mortgage. "I generally advise first-time buyers to opt for a 30-year term. If they wish to reduce the term, I coach them to make one additional principal and interest payment each year. By doing this consistently, some have been able to reduce the term of their mortgage by several years," Sorette says.

She also urges first-time buyers to have a real estate agent representing them when purchasing a house. "A buyer's agent looks out for the buyer's best interests, while a seller's agent works to sell a home for the highest possible price. So it's important that each party is fairly represented," she says. "Also, a buyer's agent is free to the buyer. The seller pays a certain amount of commission no matter if there is one agent or two. When there are two agents, they split the commission."

Sorette adds that today's market remains good for first-time homebuyers: "Interest rates are low, home prices have decreased within the last few years and there is plenty of inventory on the market."

For more advice on obtaining a first mortgage, contact Fifth Third at (866) 475-4201 or visit the Fifth Third website.