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Five Things to Getting a Mortgage Pre-Approval and Mortgage Approved

Updated on August 6, 2015

What is on a Home Mortgage Application

This is one of the best times to purchase a home, the only problem is getting approved for a mortgage. Even though there has been such ups and down in the housing market, the huge decline in prices has made purchasing a home extremely attractive. A lot of people aren't acting on this incredible opportunity because they are assuming they won't qualify for a home loan.

The reasoning for most of this thought process is because of the strict lending environment. The reality is, it's not as strict or as hard as people are assuming. If you aren't for sure if you'd be approved for a home mortgage, here is five things that are considered on an application for a mortgage.

The Down Payment For a Mortgage and Job History

A lot of people are under the impression that they need 20% down payment in order to get a mortgage, this is not true at all. There are several different types of loans requiring various amounts for a down payment. There is an FHA loan which only requires 3.5 percent down. There are also other types of loans which require 5 - 10 percent down. The "catch" to getting a mortgage for under 20 percent is mortgage insurance is required until you actually hit that 20 percent while making your payments.

The second thing looked at is job history. Banks want to know that you will be able pay your mortgage payments every month. They will look at the last two years of your job history. If you're wanting to purchase a home, don't switch jobs.

Allowable Debt and Credit Score to Qualify for Mortgage

The third thing that lenders will look at is debt load. They want to make sure that you can manage to pay all your bills not just your mortgage. The purpose for this is making sure you are not overextended. In general, debt cannot be more than 41 percent of your income. That includes your mortgage payments.

In order to qualify for a mortgage most lending companies require having a credit score of at least 640. What you want to keep in mind is that even if your credit score is lower than that it is very easy to bring up a credit score in a matter of 4-6 months. So don't get discouraged if your score is lower than that.

Paperwork Required When Applying for a Mortgage

Mortgage lenders will want documentation that will verify your financial status. You will have to provide the last two months of pay stubs. As well as savings and checking account information for the last year. As well as all aspects of utilities and rent payments for the last year.


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    • DeborahFantasia profile image

      Deborah 6 years ago from Italy

      Thank you for your comment.

    • Deborah-Diane profile image

      Deborah-Diane 6 years ago from Orange County, California

      As a former Realtor, I agree that it is very important to arrange for your mortgage before you go looking for a home. Buyers and sellers will both feel more confident that the sale will go through!