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What counts to mortgage lenders

When you're trying to qualify for a home loan, whether online or in the traditional way, lenders usually require the following:

• Income, assets, and liabilities. These items indicate your ability to make monthly payments. Give yourself time to gather information on all these areas. Your online mortgage banker will verify all the information you submit.

• Savings. Lenders want to see how much cash you have to make a down payment, pay for closing costs, and have some cash reserves for emergencies. Mortgage lenders like to see that your savings equal at least 25 percent of your annual income, indicating that you can probably afford at least a 5 percent down payment. If your savings equal 50 percent of your annual income, you can likely make a sizable down payment.

• Credit. This tells lenders how you manage the credit you've received for car loans and credit cards.

Bright Idea

If your credit record is blemished, you can still get a home loan. In this situation, many lenders require a down payment that is 30 percent of the value of the property. You'll likely pay a higher interest rate and more points to get your home loan approved. Some lenders may accept a smaller down payment with blemished credit, but you will pay more interest and possibly more points.

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