Lenders look at your DTI ratio to determine how much you can afford based on the loan you apply for. Most loan programs allow for a maximum DTI ratio between 41% and 45%.
Once you’ve received a loan estimate that fits your needs, you should ask for a rate lock. Provide the requested loan paperwork quickly so your loan closes before the rate expires and you avoid costly extension fees.
A lender credit is a cash credit your lender may offer to cover some or all of your closing costs if you’re willing to pay a higher interest rate. Although you’ll save money at closing, you’ll spend more on interest charges over the life of your loan. If closing costs are the only thing standing between you and homeownership, however, lender credits may be worth considering