Working With a Lender

Interest rates and your personal finances will influence the amount of house you can afford. For a quick estimate of a monthly mortgage payment for which you may qualify, use my buying power calculator. But remember, it's always good to talk to a lender before you start shopping for a home. I can refer you to a lender suited to your specific financial needs.

If you are like the majority of people buying your home, you will need the help of a lender. Your lender will assess the financial viability of the purchase, and provide the financing needed.

When working with a lender, it helps to be pre-approved. If you hire a real estate agent, he or she will often require a visit to a lender before you even begin looking at properties. The lender can pre-approve you which is a strong endorsement to a seller when you decide to make your offer.

Most lenders will require you to provide:

1. Tax Returns

2. Pay Stubs

3. Checking and Savings Accounts Statements

4. Billing statements from creditors, including charge cards, gas cards, auto loans, student loans, and other obligations

5. Debt information, including names, account numbers, and monthly payments

6. Employers for past two years, including names and addresses

7. Gross monthly salary

In addition to the mortgage you borrow from a lender, normally you will be required to make a cash down payment-a percentage of the purchase price that you pay for the home. Conventional loan down payments range anywhere from 5 to 20 percent, depending on the requirements of your lender. There are also specialized loan programs that allow as little as 3 percent down for those who qualify. A higher down payment often allows the lender to be more flexible with a loan package, including interest rates and closing costs. In addition to the down payment, you will need to have enough cash available to pay closing costs. Your lender will provide you with a good faith estimate of anticipated costs.