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:
- 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.
Finding a Lender
Our Find
a Lender tool helps you find a lender to answer your questions and work
with you to qualify for a mortgage. Fannie Mae's mortgage products are available
through a nationwide network of lender partners. This Find
a Lender search lets
you locate lenders in your area who may offer these or similar mortgages. The
Fannie Mae lender partner you select can work with you to find the lowest-cost
mortgage that meets your needs.
Fannie Mae’s Homes for Sale
We have properties for sale in communities across the United States. You can
search our database of
Fannie Mae homes for sale.
