Determining What You Can Afford

Before starting your search, you will need to find out how much money (mortgage) you can borrow. The easiest way to do this is by talking to a mortgage lender, who will gather basic personal/financial information from you, including:

• Income
• Debt
• Other assets
• Any down payment you would make
• Your social security number (to gather credit history and credit score information, if applicable)

Based on this preliminary information, the lender will generate a pre-qualification letter that gives you an estimate of the mortgage amount for which you would qualify. You can take this process one step further and get a pre-approval letter. In this case, the lender will pull your credit score and credit report to validate your creditworthiness and confirm the amount they will lend to you.

Keep in mind that you are not required to use this lender for your final mortgage loan. During your search, you may find a lender who offers better terms. But for now, you will know what your price range is.