Sanders, who has sold homes since 1973, said lenders have become more lenient on down-payment requirements. It shocks me, but people can now buy with 5 percent or less down. You can afford no more in a house payment than for rent. After they've applied for a home loan, many prospective home buyers realize they can afford 20 percent to 30 percent more than they expected. Often renters fail to take into account that interest on their mortgage is tax deductible, effectively reducing their monthly payment.
Lenders routinely profile mortgage applicants relative to their payment capacity.
If one lender turns you down, they all will. Sanders has a son who makes a healthy income as a self-employed real estate agent and investor. Not long ago, an unseasoned mortgage lender declined his application, solely on the basis that he was self-employed. Undaunted, he applied to a second lender and was approved immediately. If you're turned down, don't assume it's all over.