Do I Qualify for a Mortgage?

Last updated on January 23rd, 2019
Do I Qualify for a Mortgage?

Sometimes I tend to skip past the seemingly basic mortgage questions, assuming everyone already knows the simple stuff. Unfortunately, that’s not the case, and much of what I think is simple isn’t really so straightforward.

Jump to mortgage qualification topics:

The Mortgage Qualification Process
The Home Loan Submission Process
Keys to Qualifying for a Mortgage
Use Common Sense and Think Like the Lender
What You Need to Qualify for a Mortgage

So let’s talk about qualifying for a mortgage. Unsurprisingly, it’s actually a pretty complex process.

After all, you are asking a bank to loan you a ton of money for a long period of time. They’ll want to know you can actually pay it all back.

Mortgage Qualification Varies by Lender and Loan Type

  • There is no one-size-fits-all approach
  • Some lenders may say no while others says yes
  • Depends on their risk appetite
  • But your goal should be loan approval no matter where you apply

The first thing I’ll say on this topic is that qualification for a mortgage can vary greatly from bank to bank, and by loan type.

Today's Rates

For example, one lender may allow credit scores as low as 550 for FHA loans, while another may require a minimum credit score of 620.

Not every lender necessarily offers the same product or abides by the same underwriting guidelines, so some may approve you, while others may say, “No way!”

There’s also a little thing called “risk appetite,” and not every bank is as hungry as the next.

This illustrates why shopping around is paramount to secure the best deal, because one bank may agree to do business with you, but not at the best terms.

So it’s important to find the right lender for YOU.

Tip: A mortgage broker can shop your loan application with multiple banks and lenders all at once to find you the lowest rate with the fewest fees.

The Mortgage Qualification Process

  • You can use mortgage calculators on your own and get pre-qualified first
  • Or take things a step further and get pre-approved both online or in-person
  • To avoid any surprises it might be advisable to do this several months out
  • That way you can address any serious issues that might take time to resolve

If you’re interested in purchasing a home with the help of a mortgage (cash buyers need not apply), your starting point would be getting pre-qualified.

Essentially, a “pre-qual” allows you to first see if you’re even eligible for a home loan, and secondly to determine how much you can afford based on income, asset, and credit score estimates.

So you basically tell a bank or mortgage broker that you do “X” job, make “X” amount each month, have “X” credit score, and can put “X” down. It’s a starting point that relies on a lot of estimates.

At this point, they should go a step further and run some hard numbers, such as figuring out your debt-to-income ratio, to see what mortgage amount you can qualify for.

Assuming everything looks good, they may get you a more robust mortgage pre-approval, which is a commitment from a bank to lend you the money you need to make the home purchase in question.

Of course, you can run the numbers on your own without anyone’s assistance if you’re just casually wondering where you stand. But the numbers you come up with might be quite a bit different, so if you are serious about home buying, it’s wise to get a lender’s eyes on your financials.

Tip: Do this as soon as possible so you have time to correct any issues or roadblocks. It takes time to fix stuff, so giving yourself plenty of time is a smart move.

The Home Loan Submission Process

  • You apply for a loan either online or in-person
  • Your sign disclosures and submit paperwork
  • A loan processor organizes your loan file
  • And then it is sent to an underwriter for decisioning
  • If approved you must satisfy a list of conditions in order to fund the loan

While the loan submission process may vary depending on the lender you use and your own preferences, it generally begins with an online or in-person application.

Once the application is completed, you must sign disclosures in order for the lender to pull your credit and gather other financial documents.

You’ll be asked to send or upload financial statements like bank account information, pay stubs, and tax returns so your loan can be underwritten.

A loan processor will typically get involved at this point and organize your loan file before presenting it to the underwriter.

Put simply, they’ll want to make sure all your ducks are in a row before an underwriter gets their eyes on it and proceeds to scrutinize heavily.

Assuming you pass muster, your loan will be conditionally approved by the underwriter and you’ll need to send in additional documentation to get to the finish line.

At the same time, a home appraisal will be ordered to ensure the collateral is up to snuff and valued properly.

The process can take anywhere from 3-6 weeks depending on the circumstances so you’ll need to be patient. And cooperative to keep things moving along.

Keys to Qualifying for a Mortgage

mortgage qualification

You’ll need to figure out if your credit score is up to snuff and whether you have adequate income to make the proposed mortgage payment each month.

[What credit score do I need to get a mortgage?]

Generally speaking, a credit score below 620 is considered subprime in the mortgage world and will make qualifying for a mortgage that much more difficult. If you’ve got previous foreclosures on your credit report, things will get even more problematic and you may not even be eligible for a certain period of time.

But if your credit score is above 720 and you’ve got some decent credit history to back it up, you shouldn’t have much to worry about there.

Tip: Lenders want to see a minimum of 3 active credit tradelines with two-year history on each.

As far as job history goes, it’s important to show the mortgage underwriter you’ve had a steady job, typically for two years or longer.

This essentially proves that you will continue to receive regular income to make those costly mortgage payments each month.

If you just graduated and have held a job for a mere two months, don’t expect to qualify for a mortgage unless your position directly correlates with what you studied in school.

For example, if you went to medical school, and now have a job as a doctor, this might be sufficient to qualify for a mortgage.

But if you were an art history student who has been working as a flight attendant for two months, mortgage lenders probably won’t feel comfortable lending to you. Make sense?

When seeking out your mortgage, you’ll also need to consider the mortgage down payment requirements, which vary depending on the type of loan you’re after.

Zero down mortgages are pretty much gone (though not totally), so if you don’t have any assets set aside to put into your home purchase, you may be stopped in your tracks.

Obviously, the amount of money needed will also vary based on the purchase price of the home. If you want a more expensive house, expect to put more down in order to qualify.

If we’re talking about a refinance, you’ll need a certain amount of home equity to qualify for the mortgage, as determined by loan-to-value ratio constraints.

Use Common Sense and Think Like the Lender

  • Would you approve you for a mortgage?
  • If not, address those issues first
  • Don’t guess, run the actual numbers
  • And ask plenty of questions

When it comes down it, it’s all pretty much common sense. Do you think you can qualify for a mortgage?

Do you have a track record of making on-time payments, carrying large amounts of debt and paying it down, holding a job, and saving money?

Are you ready to make a big commitment? If you were the bank, would you lend you a mortgage…hmm.

[How much house can I afford?]

I would guess that most prospective homeowners could assess the situation beforehand and determine if they should be granted a mortgage.

But without running the numbers, you won’t know for certain. So be sure to do plenty of calculations and speak with a loan officer or two to see where you stand.

They’ll be able to get you a quick answer so no one’s time is wasted.

What You Need to Qualify for a Mortgage

Here’s a general list of what you need to qualify for a mortgage. Keep in mind that qualification requirements vary greatly by lender and loan type.

In some cases, you won’t need all of these things, but it should certainly make life easier to satisfy everything on this list.

  • Credit History – minimum of 3 active tradelines with 2-year history on each (credit score minimums vary)
  • Job History – at least 2 years on same job or in same line of work (recent graduates with new jobs in certain fields like doctors and lawyers may be exempt)
  • Income – verifiable income for the past two years that meets debt-to-income ratio limits
  • Assets – enough to cover down payment, closing costs, and at least two months of mortgage payments
  • Rental History – proof of clean rental history for the past two years is also important to show the lender you have a propensity to pay on time each month (those currently living with their parents may be excluded from this rule).

If you can’t meet these requirements, you may want to keep renting, saving, and working on your credit until you can. Or consider adding a co-signer who is qualified to apply for a mortgage.

But don’t be discouraged. There are lots of loan programs and creative options out there to suit all different needs. One lender may say no while another says yes.

Either way, shop around so you know all your options!

Read more: Tips for first-time homebuyers.


  1. Margaret A. Rothenhoefer May 19, 2012 at 12:32 pm -

    Thanks for all the info! I’ve been looking for this information for years! Somehow it has always seemed like both the real estate and financial industries like to keep consumers in the dark, and nobody is born knowing all this stuff. . Keep up the good work!

  2. Octavio July 11, 2013 at 4:33 pm -

    Hi, I have a 680 credit score and have been working in the same job for 3 years. I also have some money saved up for a down payment. Does this sound good enough to qualify for a loan? Your web site is really useful. Many thanks for the great info!

  3. Colin Robertson July 14, 2013 at 2:56 pm -

    Hey Octavio,

    It sounds like your credit score is sufficient, though you might want to work on it to get it above 720 in order to obtain a lower rate. Your employment also sounds good, and I don’t know how much you’ve saved up, but generally you need at least 2 months of mortgage payments for reserves. Speak with a bank and or broker to get pre-qualified. They can run your actual numbers to give you a more concrete answer.

  4. Margo July 17, 2013 at 2:56 am -

    I have good credit, assets, and a steady job, and still got denied for a mortgage. But I’m self employed, so there are more restrictions. Be careful with how you handle your income/taxes for a personal business, it could be grounds for denial.

  5. Alphonso August 29, 2013 at 8:49 am -

    I don’t have any credit cards…I hate them. Can I still qualify for a mortgage without them?

  6. Colin Robertson August 30, 2013 at 11:53 am -

    Yes, though lenders like to see a few lines of credit. If you have auto loans/leases, or student loans, those can work as well. Or any other line of credit. You may also be able to use alternatives like utility bills and/or cell phone bills to establish credit.

  7. Karey Homebuyer January 15, 2014 at 4:49 am -

    Do the new Qualified Mortgage rules make it a lot more difficult to qualify for a mortgage? And if so, how?

  8. Colin Robertson January 16, 2014 at 11:06 am -

    It’s somewhat early to be sure, but the max DTI ratio is now 43%, though there are exceptions to that rule. My assumption is that once lenders wrap their heads around the new rules, it will be business as usual. The same stuff still applies, good credit, plenty of assets, and a solid job/income and you’ll be fine.

  9. Shannon August 25, 2014 at 12:36 pm -

    My husband and I recently just paid off all our debt except my car payment and a small student loan (together payments = $600). Our credit is a little on the rough side, but we have good assets ($200k in stock, $15k in 401k and $8k liquid), an good job history. How long after our debt shows $0.00 balance on our credit should I wait to obtain a pre-approval? Found a house we love for our family and dont want to lose it. Are there loans out there for that will approval people with bad credit?

  10. Colin Robertson August 25, 2014 at 3:45 pm -


    It might take some time for those paid off balances to reflect in your credit score, but if your credit is on the rough side, I’m assuming something bad happened to make it that way, not just an outstanding balance. So paying off the loans may not make a huge difference. If you’re really in a hurry, you can pay for a rapid rescore to get your credit scores updated in a matter of days, but it may not have the desired effect. Either way, if you want a house and don’t want to lose it, you should probably take action sooner rather than later. Good luck!

  11. Ada Merrill March 2, 2015 at 7:21 am -

    I have a family daycare for 5 years. my credit score is 720+. how do i qualify for a no documentation loan?

  12. Colin Robertson March 2, 2015 at 10:53 am -


    Nowadays it’s tougher to find a lender willing to offer a no doc loan. Did you check to see if you qualify with your own income? More common today are asset-based loans, which rely on assets when income falls short, but you need a healthy amount of assets to qualify.

  13. Matt March 16, 2015 at 10:19 am -

    I moved from the UK to Baltimore in November to start work at an IT Consultancy. I had been IT consultant in the UK for 12 years and working in IT in USA for 6 years prior to that and I’m a US citizen. I’ve been paying off car loans and paying off credit cards since November and recently increased a credit card limit from $500 to $2000 this past month but the FICO score showed 677 on the application.

    We’re renting a house we own in the UK and we also are ourselves renting a house in Baltimore that we want to buy soon. Is the FICO score unlikely to increase more than few points in the coming month or 2? We were hoping to get over 700 or close to 720 as you advise.

    If we put 25% – 30% down are we more likely to get a decent rate or considered for a good mortgage?

  14. Colin Robertson March 16, 2015 at 1:50 pm -


    It depends why your score is that low to begin with and subsequently what can be improved in a short period of time. Might be worth digging into your credit report to determine that. A down payment of at least 20% helps you avoid mortgage insurance, and an even larger down payment may lower your rate and improve qualification chances. Good luck!

  15. Kerry May 6, 2015 at 8:40 am -

    I have a 665 fico score, a 27%debt to income ratio, have been at my job for 11 years, and can put 35% down. My annual salary is $67,000, and I want a house that costs $150,000 ($115,000 after down payment). Will my credit score hurt my chances of getting this mortgage?

  16. Colin Robertson May 6, 2015 at 9:12 am -


    Your score may hurt your chances depending on why it’s that low, and it could also lead to a higher interest rate on your mortgage. You may want to investigate why it’s low and how you can raise it before applying.

  17. Jo Jo June 17, 2015 at 3:57 pm -

    My credit score is 782. Never had any defaults/late payments/bankruptcies. I make $61,000/annually. I’ve been employed at the same company for 10 years. I have an auto loan in the amount of $22,000.00 and one credit card balance of $200.00. My monthly debt payments amount to $400.00. I’m in contract now to purchase a home for $280,000 with a down payment of $56,169.90 – Loan will be for $224,000. I have $61,000 in checking and savings. My loan is currently in underwriting with BMO Harris as of June 17, 2015.

    One caveat: I divorced last year. My ex and I agreed he’d take the marital home, valued at $400,000, with a $294,000 BMO Harris mortgage. The Divorce Decree orders my ex to refi or sell no later than Oct. 1, 2015 or the court will order the sale to remove my name/liability from the mortgage debt. My BMO loan officer contacted Freddie Mac. Freddie Mac advised that as long as we can document that my ex-husband is paying that mortgage on his own (for the last 12 months), that debt will be excluded from my DTI ratios. BMO has in their possession the cancelled checks from my ex showing that he paid the mortgage on his own for the last 12 months.

    Still, I worry I won’t be approved.

    What are your thoughts Colin?

  18. Colin Robertson June 18, 2015 at 9:35 am -

    Jo Jo,

    It sounds like you’re doing everything the right way and by the book so just be patient and do what they ask of you to get the loan closed. I know it’s stressful, even if you’re a perfect borrower!

  19. td October 19, 2015 at 6:15 pm -

    We were just denied a mortgage from Union Bank because they said our debt to income was too high (off by .1%). They won’t show us or explain how they calculated their numbers. I researched extensively before applying and our numbers are over 5% lower than theirs. Our income and debt is fairly simple. I have owned 10 homes and have an MBA and great credit and stable income. Is there any law that says they have to disclose how they calculated the ratios? They wanted me to buy the rate down to qualify. I said show me the numbers–they would not. Is it like they wanted to make more money on the loan and they can do this by the way they calculate dti. Any thoughts?

  20. Colin Robertson October 20, 2015 at 3:15 pm -


    Can’t you just pay something down to get it 0.1% lower? Not sure I’d make a big stink about it, but perhaps have them work to get that number down without buying down the rate if you don’t want to do that…or go elsewhere.

  21. Ak November 27, 2015 at 7:39 pm -

    My husband and i are looking to build a brand new house. I work a seasonal position and am unemployed at the moment with not a sure plan of going back to work for the same company. My husband however has been working for the same company for 13 years and recently there has been rumors stating they may be closing the venue down. This will lead my husband into unemployment for the time being.. however he does have substantial amount of money saved and no debt besides the current home we own, which we plan on selling if we go with this house. So our biggest worry is if we get approved now but by the time the house is finished and we are ready to close and his job closed down will we be denied of out loan? Since it will take some time to build this house and who knows if this job really is going to close or not.. we are torn if we should gamble it or be stuck.. but if were waiting for that date that may never happen we may never move.. what would be your advise? Thanks =]

  22. Colin Robertson December 1, 2015 at 11:39 am -


    Seems risky if you’re looking to build a new home while employment hangs in the balance. May want to look into construction-to-perm loans where you get the loan now for the construction and the eventual mortgage.

  23. Jo li December 19, 2015 at 11:31 am -

    I opened my first checking account 15 months ago they checked my score and I DIDNT HAVE ONE! Only thing on my report was a med bill that I’ve since paid and it’s removed from my report so to build some history the credit union gave me a 500$ credit card, about 6 months later I got a 300$ capital one ,6 months after that capital one raised My line of credit to 800$ I’ve never missed a payment and I carry very low balances I checked my credit recently and I now have a (696)* I have no assets but I recently just put money into my savings so my ? Is do you think I could get approved on a mortgage ? With my lack of credit history thanks

  24. Colin Robertson December 21, 2015 at 11:08 am -


    It sounds like you’re making the right moves to establish your credit history, savings, and so forth. You will also need employment history and income to qualify for a mortgage. It depends on the loan you’re looking to obtain, but you seem to be heading in the right direction. You might want to speak with some banks/brokers to see if you’re eligible. Good luck!

  25. Ellen Robison April 22, 2016 at 6:13 pm -

    Hi, I am a single 54 yr old woman, with credit score of 784. I have paid off a car loan and 2 credit cards which I never paid interest on, and I have no debt. I have over 6k in assets. I have always paid cash for my previous homes, including the one I live in now. I am in the process of selling my home to move to another. However, I may need to borrow a bit to get into a home in the state I am moving to before this home sells. I am disabled and my income is low. As soon as this place sells i will be able to pay the loan off in it’s entirety. All of the money I get for this place will be all mine as i owe nothing on it.
    Looking i the $78,000.00 range.
    Moving for health reasons, among others.
    What do you think?

  26. Colin Robertson April 23, 2016 at 10:47 am -


    Probably best to get per-approved beforehand, but if you can pay off the future home in its entirety once you sell your old one it wouldn’t really matter too much what the new loan looked like seeing that it would only last a few months or so. You’d probably want to keep closing costs low to nil on the new loan in exchange for a slightly higher rate for the same reason.

  27. Nicole June 11, 2016 at 2:52 pm -

    Hi, my partner would like to buy our first home (we currently rent) and we are currently saving for a deposit. My partner is in a well paid job for the past few years but has had poor credit but we are working on building that, we have paid off the debts that he owed and we both have credit cards to build on our credit scores. I have good credit as I got our car on finance due to my credit history and never had any miss payments on our bills. But I wanted to know do you think we would not get accepted for a mortgage due to the fact I am a full time student and only work part time?
    what do you recommend for us to do?

  28. Colin Robertson June 24, 2016 at 3:59 pm -


    Perhaps he can still qualify on his own despite your situation…but it is generally recommended to apply for a mortgage with good credit to A) get a better interest rate and B) expand your loan options and C) increase your actual chances of approval.

  29. Richard Prado July 5, 2016 at 10:35 pm -

    Hey, i know this is an old post but me and my mom are trying to buy a house together. She has no money put away, but i have 10k and my fico score was at 740 but we actually took out two cars from toyota and now my fico score is down to 713. And hers is about the same. We’ve paid off about 40% of the cars so far. Ive held my job for about a year and 5 months. How likeley can we get a decent house loan?

  30. Colin Robertson July 6, 2016 at 7:36 am -


    Sounds like you’ve both got good credit and a decent amount of assets depending on down payment and purchase price. Your sub-2 year job history could potentially create a roadblock and you didn’t mention if you’re mom is also working and if so how long and if that would add to what you can afford. Might want to start speaking with some banks, credit unions, and/or mortgage brokers to determine if you qualify for a mortgage, and if so, how much you can borrow. Good luck!

  31. April August 21, 2016 at 7:50 pm -


    I’m looking to get a construction loan from my credit union , my husband has good credit and is self employed, mine is fair and I’m a contract worker making 72k a yr, I’ve worked for the last 6 months for the same company. We are looking for a loan of 100k. What are our chances ?

  32. Colin Robertson August 22, 2016 at 7:32 pm -


    Best to speak with a lender and/or broker who can provide a pre-approval based on all your loan attributes. If your job is in same line of work it might be usable income. May want to work on improving credit too…

  33. Gwen Martin February 15, 2017 at 6:51 pm -

    Hi Colin,

    I volunteered overseas for almost three years, and returned to work in the US less than two years ago. I’m back to a job I held before volunteering, but I obviously have a long employment gap. I have a credit score of 790+, a low debt-to-income ratio, and more than 25% of the cost of the house for a down payment (as well as other savings and retirement money). One bank already said “No” and cited government regulations about continuous job history. Should I speak to a mortgage broker or simply wait?

  34. Colin Robertson February 16, 2017 at 10:13 am -


    Generally lenders want to see that your new job is going to be steady, and that might require a minimum of six months back on the job. It could help that you’ve returned to your old job, and a letter of explanation might resolve the gap in employment issue. Knowledgeable brokers can certainly help navigate situations like this as bank employees are sometimes limited in experience and product offerings.

  35. Colin B April 23, 2017 at 1:22 pm -

    Hi Colin-

    I need some insight. My credit shows a good and consistent payment history but my debt to income ration is high due to high balances on credit cards. Im in the process of paying these down now and I hope to have them down to 0 balances with some having smallish balances. My score as of right now is 649. I know this isnt great but Im hoping it will increase once these debts are paid. When a mortgage lender looks at my credit will they only see current credit score and credit balances or will they be able to look through the history of scores and debts? I have had issues for a while but Im currently on the road to recovery so I’m wondering what my chances of getting a mortgage will be once my debt is reduced and my credit score has increased to above 700. Thanks for your time.

  36. Colin Robertson May 1, 2017 at 10:55 am -


    Your lender should get an updated snapshot of your payment history and current balances based on when they pull their credit report. The caveat is that it takes time for your payments to be reflected because the credit bureaus have to update that info once they receive it from your creditors. That’s why it’s always smart to pay down debts a month or two before applying for a mortgage to ensure it’s reflected in your credit scores.

  37. Jason May 4, 2017 at 6:51 pm -

    Hi Colin,
    I got unemployed. My house worth 300k, I own about 180k mortgage. Are there any way I can get a non doc home loan so I can pay my credit card bill? Thank You!

  38. Holly May 16, 2017 at 2:24 pm -

    Hi Colin, I am retiring in December when I get my first S.S. check. My husband has been retired and has received a S.S.check for some time now. I also hold a part time job. Would it be a better idea to wait for my first S.S. check before going for a pre approval? We have credit ratings in the 680’s and are able to put the 20% down and have extra money in the bank for closings and such. Thank you

  39. Colin Robertson May 20, 2017 at 7:04 am -


    You don’t necessarily need to wait to get pre-approved since you’re basically just telling the lender/broker what your situation is for them to assess. And it’s nice to get your ducks in a row early. Once you actually apply you’ll need to get documentation/proof of that income if necessary to qualify.

  40. CP July 6, 2017 at 7:17 am -

    Hello my husband and I are present approved for 250.thousand dollars. We have sent in all of paper work. We are applying for a VA loan he is a Owner operator truck driver and I am working I’ve been in my field for over 15 yes and my husband has been in his field for over 15 years. We have some taxes to pay. Underwriter said he wanted our payment at 230. We can afford more which I Dont understand. And everything is done. We are waiting on the underwriter to give the approval. I forgot to mention we have the payment at 230 like the underwriter said. My question is can he still say no to our loan?

  41. Colin Robertson July 7, 2017 at 12:22 pm -


    Things can and always do seem to come up when obtaining a mortgage, but try not to stress about it. If you’re unclear on why they’ll only approve you for $230k, simply ask. It might be a DTI-issue or something else. And sure, loan approvals are generally conditional until they actually fund and close…which is why it’s good to get all your ducks in a row early on and avoid any missteps that can jeopardize your loan. Good luck!

Leave A Response