What You Need to Qualify for a Mortgage

Everyone knows the rewards and benefits of buying a house. Unfortunately, a lot of doesn’t seem to know what it takes to qualify for a mortgage to buy a house.

If you are planning to buy a house in the near future, now is the best time to start planning. Lenders aren’t exactly handing out loans like candy, and boosting your credit score is not that easy either. While it can be hard to qualify for a mortgage, it is not impossible.

Here are some tips to help you prepare for your mortgage application.

Credit score

Your credit score is one of the most important thing lenders look at when deciding if you are qualified for a mortgage.  Sadly, it’s also one of the things potential buyers don’t know much about.

Lenders prefer applicants with high credit score. Generally speaking, a credit score of 660 and above is considered prime. Whereas, a credit score of 620 and below is considered as subprime.

While it is impossible to achieve an amazing credit score overnight, paying off debt and paying your bills on time will slowly increase your credit score, making you a prime applicant.

Employment history

Your employment history and monthly income will help lenders understand how you’ll be able to pay for your loan in the future.

Lenders prefer borrowers who work for a company for at least 2 years and receive a steady hourly pay or a regular salary.


You don’t need to be debt-free in order to qualify for a home loan. However, you need to maintain a low debt-to-income ratio.

Lenders want to make sure that the borrower does not spend 50% of his monthly income on payables such as property tax, credit card payments, car loan, association dues, property taxes and mortgage payment.


Even if you qualify for a loan, you still need to have available funds for the down payment and closing costs. These fees must be paid when the loan closes. Some lenders may even require you to provide documents as to where these funds are coming from.

Most lenders require borrowers to have some liquid reserves after paying for the down payment and closing costs.