Today there is a myriad of choices that allow buyers find a mortgage that best fits their pocket book and housing needs. To find the right product, the American Bankers Association recommends that buyers:

• Figure out if you can afford to buy. It may seem like everyone is buying a home so you should too, but first decide if you can afford to buy. Your bank or other online resources can provide a calculator to determine if you can afford to borrow and if so, how much. Use our calculators to crunch the numbers.
  

• Do your homework. When considering adjustable rate or interest-only loans, it is important to look at both current and future income. The monthly payment on these loans will rise, but will your salary? (See chart on the pros and cons of various mortgage types.)
  

• Consider all the costs. A lender will review costs like fees, closing costs, points, homeowner insurance, etc. But consumers should also consider repairs and maintenance costs. As a homeowner, you are responsible for those additional costs – there won't be a landlord to call.
  

• Organize your finances before you go to the bank. While each bank may require different documentation – click here for a more complete checklist – at a minimum you will need:

  • Pay stubs,

  • Tax returns,

  • Financial statements (one that is less than 60 days old),

  • Copies of additional monthly payments such as car loans, credit cards, student loans, etc., and

  • Any additional information – like proof of additional income – that you think will help your banker to positively evaluate your credit request.
    

• Pay off or pay down other loans. Credit cards, auto loans or other small loans should be paid off or paid down before you look for a mortgage. This will help increase your credit score and qualify you for a larger mortgage or lower interest rates.
  

• Plan for the future. A home is a long-term investment, so if you plan on being in an area only a short time, renting may be a better option. Typically, if you plan on staying in an area less than five years, buying a home may not be worth the cost of the investment. Instead, focus on paying down debt and building savings.

For more information on homeownership, such as FAQs, calculators, government programs, etc, check out ABA's Homeownership Page.