These four components of your financial life are reviewed by lenders to determine the loan amount for which you qualify. To qualify for a loan means all four components have been analyzed and found to be sufficient for the type and amount of loan you want.
 |
 |
 |
|
Income |
Credit |
Assets |
| How much?
How stable? 2 years or more at the same job is the standard. How spent? The ratio a lender uses qualify your income is your DTI (Debt-to Income) ratio, all of your debt payments divided by your income. Lenders need to see your DTI is 43% or less to qualify you. |
A lender will examine a report on your credit drawn from the three nationwide credit bureaus
Each bureau presents a score for you ranging from 400 to 850. The higher the scores, the easier it will be for you to qualify for a loan.one filler line |
You must prove you have enough money for the down payment, closing costs and fees involved in the loan you want.
Typical minimum down payment needed for a conventional loan is 5% and for an FHA loan is 3.5%. You must have sufficient “reserves” (money left over) after closing to meet lender requirements for your particular loan. |
 |
|
 |
|
Filler |
||
|
In |
 |
In |
|
Income |
Collateral |
Income |
|
Income |
The home you buy is the mortgage collateral you provide to the lender to secure (protect) the loan the lender provides to you.
The home must be in satisfactory condition and adequate for its intended use. The lender will apply a loan-to-value ratio (LTV) to limit the loan to a certain percentage of the home’s value. |
Income |
|
Income |
|
Income |
