How to qualify for a mortgage | Requirements and guidelines for 2020
Buying a home can seem a daunting process, and in some cases it is. We will try to help you better understand the process so you know if you qualify for a mortgage and what type of loan is best for you.
In this article we will review the initial payment and credit score requirements, debt / income ratio, qualifying income and more. It is important to remember that each mortgage program has different requirements to qualify.
For the most part, the days go by when you need a large down payment of 20% to qualify for a house. There are several types of mortgages that require a low down payment, or no down payment. You also do not have to be a first time home buyer to qualify for these programs.
FHA loans are one of the most popular types of mortgages that are used today, this is due to flexible requirements. You only need a 3.5% down payment for FHA in most cases. For each of the programs listed below, you can use the gift funds for the down payment.
One of the most important factors in determining whether you qualify for a mortgage or not is your credit score. If you have good credit, there is no reason to worry. However, if you have bad credit, it will be much more difficult to obtain approval for a mortgage loan. Ideally, you want a credit score of 680 or higher. Some lenders require a credit score of 640, while others may accept lower scores.
Minimum qualifying credit rating requirements are established for each loan program. However, lenders do not have to follow them and, in general, will establish their own credit rating guidelines. If you have poor credit scores, be sure to get a copy of your report.
You can read this publication on how to improve your credit scores. These are the lowest credit score requirements that you can usually find for each type of mortgage.