Buying a new home usually requires home financing. After all, very few people can afford to buy a home with cash. When you’re going through the process of home financing, consider these questions to ask yourself or your lender.

1. Can you afford the new payment? Sure, you may qualify for a specific amount. But, can you really find a way to easily work it into your monthly budget? If not, you should think about borrowing less than your max qualifying amount.

2. Will the home you’re buying appreciate over time in the area you’re buying? Take a look at other real estate around your home and what it’s worth. If home prices in the area having been going down drastically over a lengthy period of time, you may want to feel warned. You want your home investment to grow over time, so you can gain equity and have a sound investment.

3. Is it worth it to purchase points? Sometimes lenders offer you the ability to “purchase points” on a home loan. This means you are paying a pre-payment (of cash) to the lender in return for a lower interest rate. It can be expensive to do this and may not benefit you overall. However, there are special cases where this can be a good thing to do.

If you are well prepared and know what you’re getting into, home financing won’t be nearly as overwhelming. You’ll feel great knowing you can afford your new home and got the best deal you could on your financing end of things.