Shopping for and finally owning a home is a very emotional experience and for most of us, the biggest purchase you will ever make! If it is true that your home is your castle, then that is reflected here. Bermudians and other residents lavish love on their homes, and why not? Where else can you see a full moon rising over the Atlantic just before last night's storm? Or a 180 degree full-spectrum rainbow, ending naturally at your doorstep?

The same care and attention when purchasing that home should be used to research your mortgage. And unlike many other countries, here you have a name and a presence; you are not a next-in-line number dealing with an anonymous credit person. You will receive personal attention from all of Bermuda's mortgage companies while your particular set of financial circumstances is carefully considered. Free market competition is such a wonderful thing; it gives you greater access to more information, and a greater comfort factor when making your final decision. The consumer, in this way, drives the market in choice of lenders, best rates, best product and service. Everyone benefits.

A little more than five years ago, figuring out your options in the mortgage process, such as how much house could you afford, how much of a down payment, how long a time frame, and so on, was cut and dried. There weren't many options: 30 percent down payment, nine percent to 9.5 percent interest rates (had to keep those 7.5 percent fixed deposits going), 15 years longest term limit, and no matter how old, pay it off before you turn 65. Simply saving for the down payment was a staggering chore for hundreds of households.

Finally, for those finally able to scrape up the down payment, after vigorously shopping for the dream home that they might set their hearts on, it would transpire during the approval process that they did not qualify ? they just couldn't quite stretch the savings and income far enough. It even happened to yours truly, who when asking about choice of mortgage terms, was told flat out, well, no matter what, you have to have the mortgage paid off by the time you are 65. So, if you are 55 ... that gives you ten years to ante up some horrendously huge monthly payment to reach your goal in time ? debt free.

That's all changed. Today, everyone wanting to own a piece of the rock, no matter their age, is seriously encouraged to work through the pre-approval mortgage process. Once your personal financial situation is assessed, you know what you can afford and what the bank will lend to you. The process can be both seriously motivating and exhausting, because it deals in reality of now. It asks the question; are you willing to change your lifestyle, your thinking, and your attitude to make this happen? And it works. I have seen couples and families achieve the unachievable through hard work and great determination.

The mortgage pre-approval process determines the amount you can borrow by reviewing the following:

Monthly income: Add up regular salary, part-time jobs, alimony payments, interest income on savings, etc.

Monthly expenses: Electricity, rent, water, gas, car/bike insurance, transportation, food, clothing, day care, after school activities, phone/cable/internet/mobile, entertainment, life insurance, treats, credit card payments, other loan expenses, vacations, Christmas, church tithing, you get the picture. Don't forget to take one-twelfth of those annual expenses.

Estimated savings: What can be designated for the down payment

The value of the property is used to calculate your loan amount. If you have no idea what you can afford, your mortgage officer can impute a home value based upon his/her estimate of the amount you can safely borrow. Say you are pre-approved for a $300,000 mortgage. Imputing an 80 percent mortgage with a 20 percent down payment (divide 300,000 by .80= 375,000) will arrive at an estimated home purchase price.

Debt-income ratio ? your combined debt and housing expenses generally should not be more than 50-55% of your monthly income, but lenders are sometimes quite flexible in considering all extenuating circumstances.

Credit history ? meeting debt obligations on time is always a plus in your favour. Getting rid of your outside debt is even more desirable for creditworthiness.

Financing choices are offered by all major banks. While it pays to shop around, setting up a grid to compare the various rates, terms, down payments, and fees is a great way to compare all offerings. Variable rate mortgages are generally lower than fixed rates, but in a rising interest market may be susceptible to increases. Fixed rate mortgages lock the same rate in for the life of the mortgage, but tend to look punitive when market interest rates are low. Term borrowing limits can vary from ten to 30 years. Construction loans, re-financing, equity loans and lines of credit are all structured to meet the need of the individual borrower. It is up to you to ask questions and do your homework.

From the imputed value above, we see three hundred seventy-five thousand dollars for a home! Laughable, you may think, in today's inflated housing environment, but keep in mind this is a first step. Only five years ago, this author looked at more than one home in the $325,000 price range, and even that seemed too high. According to prominent realtors in newspapers this week, housing purchases have slowed while prices are flattening as additional units hit the market. This may be your time.

And consider this, if you are just starting the process, your career, your purchasing power, and your quest to nest will continue to dominate your thinking. Many have felt this goal unreachable, yet by seeking and creating opportunities, have earned their way to a home of their own.

Next week: What kind of house should you buy and creative ways to make the dream a reality.