Develop a family budget.
Instead of budgeting what you'd like to spend, use receipts to create a budget for what you actually spent over the last six months.  One advantage of this approach is that it factors in unexpected expenses, such as car repairs, illnesses, etc.
 
Reduce your debt.
Lenders look for a total debt load of no more than 36 percent of income. Since this figure includes your mortgage, which typically ranges between 25 percent and 28 percent of income, you need to get the rest of installment debt—car loans, student loans, revolving balances on credit cards—down to between 8 percent and 10 percent of your total income.
 
Control your expenses.
You probably know how much you spend on rent and utilities, but little expenses add up. Try writing down everything you spend for one month. You’ll probably see some great ways to save.