Make better decisions before you borrow.

Lenders look at how much of your income before tax goes to debt. A common guide is a housing payment of no more than about 28% of it, and about 36% for all your debts together, though many loans allow more. What a lender will approve and what feels comfortable each month can be different numbers.

Less than 20%, often. Some conventional loans take 3% down, FHA loans 3.5%, and VA and USDA loans can take nothing down for buyers who qualify. Putting 20% down on a conventional loan avoids mortgage insurance and lowers the payment.

Principal and interest on the loan, plus property tax and homeowners insurance, which are often collected with the payment and held in escrow. Add mortgage insurance if you put down less than 20%, and HOA dues if the home has them.

Private mortgage insurance protects the lender, not you, on a conventional loan with less than 20% down. You can ask to cancel it once you owe 80% of the home’s original value, and it ends on its own at 78%. FHA loans carry their own mortgage insurance, which often lasts for the life of the loan.

A fixed rate keeps the same rate and principal-and-interest payment for the life of the loan. An adjustable rate starts lower for a set number of years, then moves with the market, so the payment can rise. Fixed costs more at the start and buys certainty.

A 15-year loan has a lower rate and costs far less interest, but a much higher payment. A 30-year loan keeps the payment down and lets you pay extra when you can. What the shorter term saves depends on how long you keep the loan.

The rate sets your interest. The APR adds points and certain fees to it and spreads them over the loan, so offers with different costs can be compared. It assumes you keep the loan to the end, which most people don’t.

A point is a fee of 1% of the loan, paid at closing, usually to lower the rate. Points pay for themselves only if you keep the loan past the month the lower payment makes them back.

The lender’s fees, the appraisal, title insurance, taxes and other charges due when the loan closes, often 2% to 5% of the loan. Your Loan Estimate lists them within three business days of applying, and your Closing Disclosure gives the final figures at least three business days before closing.

Pre-qualification is a quick estimate from what you tell a lender. Pre-approval means the lender has checked your credit, income and assets, and sellers take it more seriously. Neither is a final commitment to lend.