Education for Buyers

Qualifying for a Mortgage Loan

INCOME:

One of the first items a lender will consider is your income. When qualifying you for a loan, a lender will use your gross income - the money you earn before taxes. Many lenders will consider income from a part-time job if you can show you had the job for at least two years.

DEBT:

In general, debts include your house payment, installment loans, credit card balances, and child support.

EMPLOYMENT:

Mortgage lenders are more likely to lend money to people who have worked for several years at the same job or at the same type of job. The lender will verify your employment through your employer. If you are self-employed or if you have been at your job less than two years, be prepared to submit federal tax returns.

CREDIT:

Good credit is very important in qualifying for a loan.

However, if you have had a:

Judgment or have a collection on your credit report, these would need to be paid in full prior to loan application. Any past due accounts must be brought current.

Bankruptcy in the past, you would need a copy of the discharge. Then you would need at least 24 months from the time of discharge of the bankruptcy to the time of loan application.

Foreclosure in the past, there would need to be at least 36 months from the time the claim was paid in full.

(NOTE: In the three credit situations listed above, good credit should be quickly reestablished.)

Next: Getting Approved for a Home Loan