A mortgage is a big commitment and defaulting on a home loan can cause a lifetime full of financial problems if you go into it without being truly prepared. Being financially ready to take on the responsibility of a mortgage is something perspective homeowners should consider before shopping for a lender.

Here are some questions to ask yourself if you are thinking about securing a mortgage:

How Much Have You Saved For a Down Payment?

While there are some options available for individuals who can not afford to make a sizable down payment on a home, traditional lenders want to see at least 20% cash down based on the sales price of the home. If you have not saved the full 20%, you will have to pay additional fees for private mortgage insurance until you have secured enough equity in your home. Additionally, lenders will not be able to offer you the best interest rates on the mortgage, leaving you to pay higher payments each month.

Are You Credit Worthy?

No lender wants to loan out cash to someone who is a risky investment. Defaults on loans are what initiated the mortgage crisis and lenders are doing everything they can to limit their risks of default. One resource a lender uses to gauge your level of financial responsibility is to check your credit score and credit history. If history shows you have not lived up to previous financial obligations or if your credit score is below lender’s requirements, you may not be eligible for a loan. Even your credit is good enough to get you the mortgage but not good enough to get the best interest rates, you’ll end up paying more for a mortgage monthly.

Can You Cover Mortgage Costs?

Lenders will verify your debt-to-income ratio to ensure you have enough income to afford the mortgage payment each month. Your debt-to-income ration is calculated based on the pre-tax income you bring home. Your mortgage payment including taxes and insurance should be no more than 28% of your income. Lenders will need to see that your paycheck will cover your basic living expenses and other financial obligations in addition to your mortgage.

Is Your Job Stable?

When applying for a mortgage, lenders want to know that you are stable in your job. A history of steady employment, preferably at the same place, is a factor that influences a lender’s decision. If you have recently started a new job, you may want to wait for some time to pass before applying for a home loan. A lender typically likes to see two years of stable employment history. For self-employed individuals, a mortgage is still possible but it may require more financial documentation to prove stable income.

What Is the Status of Your Debts?

While a mortgage lender will have thoroughly checked your credit score and analyzed your debt-to-income ration, you can still be denied a loan because of your debt load. If you carry a lot of credit card balances, your lender may decline your application. The general rule of thumb is no more than 36% of your pre-tax income should be going toward paying off other debts.

As the master of your own finances, you should have a good idea of whether or not you can truly afford a mortgage. It is always best to err on the side of caution and continue to save cash towards a new home until you are completely prepared to take on the added responsibilities of becoming a homeowner and paying for a mortgage.