Tiffany Sebasitan, Realtor

With home prices falling in many parts of the country, and with a large stock of unsold homes available in most areas, this could be a good time to buy a home. Homeownership can help you build wealth, reduce your taxes, and establish good credit. But there are potential downsides, including increased financial responsibilities, maintenance costs, and the possibility that the value of your home may decrease.

Working with Your Lender

Your lender will take many things into consideration when determining if you qualify for a mortgage to buy a home. Below is a snapshot of some of the information your lender will need from you.

Your Finances

Your lender will want to know about your finances:,/p>

  • What is your current income?
  • Are you employed?
  • Do you have a history of steady employment?
The lender will use this and other information, as well as the interest rate you will have to pay on your mortgage, to determine your ability to qualify for a specific mortgage and pay that mortgage over the long-term.

Down Payment

Your lender will ask how much you have available for a down payment. In general, the larger the down payment, the more likely the lender will qualify you for a mortgage. A large down payment provides instant equity in a home and is a good indicator of successful homeownership over the long term. The lender will also outline loan fees – the up-front costs of originating, processing, and closing the loan.

Credit History

Your lender will review your credit history – how well you’ve paid your debts in the past – by reviewing your credit report. The lender will consider the amount of money you owe on credit cards, car payments, student loans, and other debt. The lender will also review your ability to pay property taxes, homeowners insurance, utilities, homeowners’ association fees, and other maintenance and repair fees.

Price of Home

Your lender will review the price of the home and likely require an appraisal to determine whether to approve the mortgage. The lender will be looking to see if the sale price is comparable to similar homes in the neighborhood.

Escrow Accounts

Your lender will talk to you about setting up an escrow account, which is a place to set aside a portion of your monthly payment to cover annual charges for homeowner’s insurance and property taxes. Escrow accounts are a good idea because they assure money will always be available for these payments.


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