With low interest rates and low home prices, now is an ideal time to purchase a home. Taking the plunge into home ownership is a big decision and there are ways to make the process go as smoothly as possible.

The first thing you can do is prepare a complete picture of your finances to take to your lender. If you don't have a lender, this is useful information when shopping for one.

Expect the lender to take a look at:

Your employment history

Lenders typically consider two years at the same job as employment stability.

“Lenders are looking for stability right now,” said Linda Asmussen, owner/broker at A Team Mortgage. “Having the same job for two or more year shows that stability.”

Current debt and credit rating

Lenders will make decisions based on your income to debt ratio. Basically, they want to see that you pay your bills on time and have enough money coming in to cover your obligations.

“Lenders are looking for an income to debt ratio of 41 percent including your house payment,” Asmussen said. “So that means that only 41 percent of your income goes to paying off debt.”

We all know how important a good credit rating is thanks to numerous television commercials. But what is a good score? It depends on the type of loan you want.

“Certain programs such as FHA, VA and USDA look for a credit score of 620 or higher,” Asmussen said. “To qualify for a conventional loan, you'll want a score of 660 or higher.”

Asmussen also said the days of zero percent down are over. Most lenders now require 3 to 6 percent down — with one exception.

“The USDA offers a 100 percent loan for those who qualify and want to live in a rural area,” she said.

Records of all your asset and liability accounts

For most of us, a home is our biggest asset. The bank that lends you the money for home is going to need a lot of information. By gathering the following information ahead of time and having it ready for the lender you will be ahead of the game.

• Social Security numbers for you and your spouse, if you are both applying for a loan.

• Copies of checking and savings account statements for the past two months.

• Evidence of other financial assets, such as IRAs, CDs, bonds, stocks.

• Paycheck stubs for the past two months.

• A list of other personal property including life insurance and retirement accounts.

• Outstanding debt details including account numbers, balances due, and monthly payments on credit card loans, student loans, car loans, and installment debt.

• Copies of your last two years' income tax returns, or originals of W-2 tax forms from the Internal Revenue Service.

• Name and contact information for employment verification for the past two years.

• Current and previous addresses.

• If you own a home bring the address, current market value, mortgage lender name, account number, current monthly mortgage payment, and outstanding mortgage balance.

• If you currently rent bring the address, name and contact information for your landlord, monthly rent, and previous landlords to cover a two-year period.

• If you already have an agreement to purchase bring a signed copy and any amendments, a copy of the listing form, the legal description of the property, and receipts for down payment.

Shopping for a lender

Once you decide to seriously start looking for home, you can ask your bank or mortgage company for either a pre-qualification letter or a pre-approval letter.

A pre-qualification letter is a letter generated by the lender that does not verify income, credit, debt, etc. A pre-approval letter is a letter that verifies all that information.

“Always get either pre-qualified or pre-approved before you start shopping for a new home,” Asmussen said. “Otherwise you won't know what you can afford and end up disappointed.”

Asmussen, who has been a mortgage broker for 25 years, agrees that now is a great time to buy — especially for first-time home buyers. But she also urges patience.

“Buyers need to be patient especially when working with short sales because it takes time to approve that type of sale.”