Who Qualifies for a Mortgage? Key Requirements You Should Know
Dreaming of buying your own home? For most people, that journey starts with qualifying for a mortgage loan. But lenders won’t hand over hundreds of thousands of dollars without checking a few important boxes first.
So, what exactly do you need to qualify for a mortgage?
In this post, we’ll break down the key requirements lenders look for and how you can prepare yourself for mortgage approval whether you’re buying your first home or upgrading to your next.
✅ 1. Credit Score
Your credit score is one of the most important factors lenders consider.
What’s the Minimum Score?
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Conventional loan: 620+
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FHA loan: 580 (with 3.5% down) or 500 (with 10% down)
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VA and USDA loans: No minimum set by government, but lenders usually prefer 620+
How It Affects You:
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Higher score = lower interest rate
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A poor score may limit your options or require a larger down payment
Pro Tip:
Check your credit reports early and fix any errors before applying.
✅ 2. Income and Employment
Lenders want to ensure you have a steady and reliable income to cover your mortgage payments.
What They’ll Ask For:
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Pay stubs (last 30 days)
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W-2s (last 2 years)
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Tax returns (especially if self-employed)
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Bank statements
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Employment verification
Guidelines:
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Ideally, 2 years of consistent employment in the same field
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Freelancers and business owners may need additional documentation
✅ 3. Debt-to-Income Ratio (DTI)
Your debt-to-income ratio compares your total monthly debt payments to your gross monthly income.
Why It Matters:
It helps lenders assess your ability to handle additional debt (like a mortgage).
Typical Limits:
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Conventional loans: 36% to 43%
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FHA loans: Up to 50% in some cases
Calculate Your DTI:
DTI=Monthly debt paymentsGross monthly income×100\text{DTI} = \frac{\text{Monthly debt payments}}{\text{Gross monthly income}} \times 100
✅ 4. Down Payment
The down payment is the upfront amount you pay toward the home.
Minimums:
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Conventional loan: 3% to 5%
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FHA loan: 3.5%
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VA/USDA loans: 0% (no down payment required)
Why It Matters:
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A higher down payment can lower your loan amount and monthly payments
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Putting down 20% or more eliminates the need for private mortgage insurance (PMI)
✅ 5. Property Appraisal
Lenders require an appraisal to ensure the home is worth the purchase price.
If the appraisal comes in lower than expected, you may need to:
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Renegotiate the price
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Increase your down payment
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Walk away from the deal
✅ 6. Documentation
Expect to provide thorough documentation. Be ready with:
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Identification (driver’s license or passport)
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Social Security number (for credit check)
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Proof of assets (savings, retirement accounts, etc.)
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Explanation letters for any credit issues or large deposits
✅ 7. Loan Type Eligibility: Who Qualifies for a Mortgage? Key Requirements You Should Know
Different loans have different criteria:
🔹 FHA Loan
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Easier to qualify
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Lower credit and down payment requirements
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Ideal for first-time buyers
🔹 VA Loan
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For eligible veterans and active-duty military
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No down payment or PMI required
🔹 USDA Loan
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For rural and suburban buyers
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Income and property location restrictions apply
Final Thoughts on Who Qualifies for a Mortgage? Key Requirements You Should Know
Getting approved for a mortgage is all about showing lenders that you’re financially ready to handle the responsibility of homeownership. While the process may seem intense, knowing the key requirements ahead of time can save you stress and help you move faster when the right home comes along.
Take the time to review your credit, gather your documents, and explore your loan options. With preparation, the keys to your new home could be closer than you think.
