Qualifying for a Mortgage

There are basic qualifications for every type of mortgage. Below are the basic things an underwriter considers when deciding whether to approve a home loan. In addition to these basics, each loan has specific requirements.

Credit

Probably one of the most important pieces of the puzzle is the credit scores of each borrower. With a score in the 700s and especially with 740+, you can pretty much get whatever loan you want. But, if your score is 620 or below, your options will be limited to a government loan.

Ability to Repay

The underwriter will look at your income, employment history, and debts to get an overall idea of whether or not you’ll be able to repay the loan. They look at your entire financial picture because if they recommend approval, they have to show you can repay the loan.

Down Payment

How much down payment are you putting down? This will make a difference in being able to qualify for a mortgage. Although some loans like VA and USDA don’t require a down payment, others like FHA and conventional loans do. The more money you put down on a property, the less risk the lender has, and the better you look as a borrower.

Income

Part of your ability to repay has to do with your income. It has to be stable and continuing. The underwriter looks at your last two years’ history. If you’re considering changing jobs — or careers especially — wait until after your mortgage closes.

Assets

Your qualifications as a borrower illustrate how much money you have in the bank, equity in your real estate, or other assets like investments. The more, the better. But, of course, other factors (like excellent credit) can compensate for having fewer assets.

Why Homestead?

Homestead is a top lender of mortgage loans for purchasing and refinancing. Your loan advisor can walk you through every step of qualifying for a mortgage. Our rates are some of the lowest in the states we serve. Our loan advisors provide excellent service, as you can tell from our reviews. Plus, we close fast!