A home is the single most expensive thing most of us will ever buy.

That's why you need to put as much time and effort into finding a mortgage, and preparing yourself financially, as you do hunting for your dream house or condo.

So, take a few minutes to look at the seven biggest mistakes people make when shopping for a mortgage and see how to avoid making them.

Mistake Number One is not aggressively shopping for the best deal. Check the interest rates and fees dozens of lenders are offering on our mortgage rate charts. Obtain bids from local banks or mortgage brokers. Getting the right loan, at the right interest rate, can save hundreds of dollars a month and tens of thousands of dollars over the life of the mortgage. Click here for step-by-step advice on how to find the best interest rate and home loan.

Mistake Number Two is applying for a loan without checking your credit history for mistakes that make it more difficult to qualify for a loan, or require a higher mortgage interest rate. To get a free credit report from each of the three major credit reporting bureaus go to www.annualcreditreport.com. Each credit report shows how to correct mistakes or submit an explanation for legitimate black marks that appear on the report.

Mistake Number Three is spending too much money on a home. Avoid that by calculating how much you can really afford. Start by looking at all of your bills and determine an affordable monthly mortgage payment. (Include a realistic estimate for taxes, insurance and condo or association fees.) From that, calculate the amount that could be borrowed at prevailing mortgage interest rates. Add the size of the down payment and that should be the limit. Don't let real estate agents repeatedly show you homes outside this price range. Don't work with mortgage brokers who push you to borrow more than you can afford. Click here for help deciding how much to spend on a home..

Mistake Number Four is not getting pre-approved for a loan. This is an important reality check and it's free. A lender will look at your credit history, income, savings and debts, and decide on a loan cap. The entire amount doesn't have to be borrowed. But if you can't get pre-approved, or can't get pre-approved for as much as you want to borrow, that's a big red flag. Click here to learn all about getting pre-approved.

Mistake Number Five is taking out a potentially dangerous loan that sends monthly payments skyrocketing beyond affordability. A traditional fixed-rate loan will have the same monthly payment at least for principal and mortgage interest rates -- for the life of the loan. The same cannot be said for adjustable-rate mortgages or ARMs, interest-only loans and the most hazardous of all, option ARMS. It's critical to understand all the loan terms and be prepared for the initial low monthly mortgage interest payments to grow substantially in a few years, a single year, or even in the first month. Click here to learn more about option ARMS and interest-only loans.

Mistake Number Six is failing to plan for the unexpected. Fires and natural disasters such as hurricanes, floods, tornados and earthquakes can strike without warning. Buy enough insurance to rebuild the house and replace everything in it. Illness, injuries and layoffs must be anticipated as well. Have enough savings to live at least three months, and preferably six months, without a paycheck.

Mistake Number Seven is not appreciating how much owning a home really costs. Make sure the heating and cooling bills don't deliver nasty surprises. Be prepared to spend an average of a hundred dollars or more a month on everything from toilets that won't flush to lawnmowers that won't start to furnaces and roofs that must be replaced. If you've been renting, be especially careful not to let those expenses wreck your budget.

By Stef Donev

Interest.com Contributing Editor

Have questions about your finances? Ask us at editors@interest.com