How Do I Qualify for Mortgage?

Joe Schwartz

Joe Schwartz

Mortgage Loans Editor |

Discover what you'll need in order to qualify for a mortgage. image

Lenders may require pre-approval or pre-qualification. Pre-qualification allows you to compare loan details without a credit assessment.

Meanwhile, pre-approval means the lender evaluates your credit score and finances which requires a hard credit inquiry. Here’s what lenders typically look at when considering whether or not you will qualify for a mortgage.

Down Payment

Eligibility for a mortgage will require the person to put down a percentage upfront. The higher the amount, the more ownership or equity you will have. This will also reduce the amount paid in financing for the duration of the loan. To qualify for good mortgage rates in a standard mortgage, most lenders require a down payment of at least 20%.

Total Debt

One major factor in determining whether or not you qualify for a mortgage is the amount of outstanding debt you have. This includes debt such as car loans, credit card debt, and student loans. Typically, lenders limit the total debt to below 36% of your gross monthly income.


When determining whether or not you’ll qualify for a mortgage, lenders want to ensure that your income will more than cover your mortgage payments. A good general rule is to ensure your mortgage payment does not exceed 30% of your total income. This can be combined income if you and a spouse/partner are purchasing a home together.

Credit Score

Finally, a major factor in mortgage qualification is credit score. Lenders want to be sure that you have a solid history of paying bills on time, and aren’t someone who will be unable to cover the monthly cost of the loan. If your credit score is particularly low, consider a co-sign loan in which you use someone you trust to co-sign the loan with you, allowing you to qualify for better terms.

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