A home is more than a place to live. It is a financial asset, a place to raise a family and an investment in the community. If you are considering a new home, you aren't alone. According to the National Association of Realtors®, based on current trends and underlying demand, the overall U.S. homeownership rate could exceed 70 percent by 2013.

To help you make the most of your investment, the housing counselors at Money Management International encourage you to avoid some common and costly mortgage mistakes.

Mistake #1: Confusing the terms "qualify" and "afford."
When determining how much home you can afford, remember that your mortgage payment, plus your ongoing debt (credit-card payments, car payments, student loans, child support and so forth) should be no more than 41 percent of your gross income, or you are getting into expensive trouble. For example: gross monthly income of $2,000 multiplied by 41 percent equals $820.

Mistake #2: Shopping for a monthly payment.
When comparing mortgage-loan products, it is important that you look at the big picture. For example, while a 40-year mortgage might offer a slightly lower monthly payment than a 30-year loan, you end up paying more in interest over the life of the loan. In addition, it will take longer to build equity.

Mistake #3: Underestimating the true cost of homeownership.
There are many costs that are incurred by new homeowners. There are up-front costs, including the down payment and closing costs.

The other additional costs you might incur include realtor's fees, property taxes and homeowner's insurance.

The costs most people are surprised by are the little things you need to buy once you get into the house, so a realistic budget is essential.

Finally, before applying for any type of loan, it pays to perform a financial checkup. In addition to your debt-to-income ratio, lenders also look at your work and credit history.

If your credit is less-than-perfect, there are legitimate mortgage companies that will approve your loan. However, they will probably require a larger down payment than normal and will charge a higher interest rate. Therefore, it is wise to improve your financial standing before you buy a house, even it takes some time and effort.