- back to Buyer's FAQ

Though you may be willing to spend a certain amount, the real determination of how much house you can buy is driven by how much a lender calculates you can afford. Gone are the days when “creative financing” could be used to manipulate your credit worthiness or your ability to buy a home. Government regulation and guidelines are specific and unavoidable. There is little flexibility in lending today, though there are still a few programs that give you some wiggle room.

• How much down payment you’ll need
• Your closing costs
• Your monthly payment (including PITI: principal, interest, taxes and insurance)
• The type of loan for which you qualify and which best suits your needs
• Special programs for which you may be qualified, including those for veterans, first-time buyers, teachers, down payment assistance etc.

To become pre-approved you will need to provide a lender with the following:

• Your employment and income history (including recent pay stubs, tax returns, W2s, 1099s)
• Your monthly debt (credit cards, car loans, personal loans)
• The amount and source of cash available for the down payment and closing costs (the source is critical here. You may not use funds from an account that has large, unidentified deposits)

Pre-Approval letters are not binding on the lender, they are subject to unknown factors and appraisal of the home you want to purchase, and are time sensitive. If your financial situation changes, interest rates rise or a contracted date passes, the lender will need to review your situation and recalculate your maximum mortgage amount accordingly.