6 Things You Need To Qualify For A Mortgage

6 Things You Need To Qualify For A Mortgage

If you’re looking to take advantage of record low interest rates you may find that lending practices are far stricter than they used to be. Bad lending practices and tighter government regulations have made it harder than ever to get a mortgage.

If you’re thinking about moving, check out these 6 factors for getting a mortgage to make sure you have your financial house in order before you go looking for a new home.


Want to look good to the bank? Have some money in your savings account, checking account or any other account. First, it’s a great idea to have sat least 20 percent of the purchase price of the home for a down payment ready.

But then, having more money in the bank to cover additional costs will make you look like an even more trustworthy buyer.


Obviously you’ll need a job to pay for your new home. You will be asked to provide your W-2 form or paycheck stubs to prove that you can pay for your new home. You’ll want to have been at your job for at least 6 months to look stable and second jobs rarely count unless you’ve been there for many years.

If you’re self employed you’re not out of luck, but you will need to prove your income. Usually the banks will ask for the last 2 years of your tax returns. If your current income is higher, it won’t matter much, they will determine your income based only on past history.

You can also ask for other sources of income to qualify like alimony or child support, but you’ll need documentation showing how long the payments will continue.

Debt To Income Ratio

Lenders want you to have high income and low debt. Your DTI is the percentage of your income that you spend paying for debts like mortgage payments, credit cards, auto loans, student loans and other expenses.

You should aim to have a debt ratio of less than 40% of your income. For FHA loans, you’re looking at a 31 percent cap.

Credit Score

Obviously your credit score plays a big role in whether or not you can get a mortgage. You’ll need a score of at least 600 for any hope of qualifying for a loan. But for the best rates you’ll want to be sitting at 740 or higher.

The bank will look closely at any major negative marks on your report such as bankruptcies, late payments or other negative judgements when making their decision. If you have these on your report, it’s best to wait until they drop off your report to apply for a mortgage.


Debt is a nasty 4 letter word that plagues most people, so if you have some debt, don’t worry. It will not automatically disqualify you if you have solid income.

However, know that having too many open credit cards or too much debt in general can hurt your odds of getting a mortgage. If you have a lot of open cards, you may be able to provide an explanation to the bank to still get the mortgage without closing some of your accounts.

About The Author

Edwin is a marketer, social media influencer and head writer here at Stack The Chips. He manages a large network of high quality finance blogs and social media accounts. You can connect with him via email here.

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