How Do I Qualify for a Mortgage?

A series of financial elements, both current and historical, will be considered to determine whether you qualify for a mortgage. There are certain absolutes that will influence whether a bank will award this loan, however. To qualify, you should be prepared to invest a certain amount of cash for a down payment, demonstrate proof of income, provide a satisfactory credit history and score and prove that there is enough money coming in to sustain mortgage payments.

A mortgage is a loan provided by a financial institution, primarily a bank. The average person cannot purchase a home by paying for it in cash at one time, so mortgages can make home ownership possible in many places. In order to make yourself an attractive candidate for a mortgage, there are certain conditions that you can meet to help you qualify for a mortgage.

Usually, the entire price tag of a new home is not financed, meaning that a loan will have to be coupled with some of the buyer's cash in order for a sale to take place. There might be a minimum down payment requirement based on several factors, such as whether it's your first mortgage, your credit history and external market and economic factors that can influence the housing market. You might need to save as much as 20 percent of the amount you intend to spend on a home before you will qualify for a mortgage.

Lenders appreciate proof of employment and steady income, and this will help you qualify for a mortgage. Prepare to give the lending institution your pay stubs or proof of employment for the past two years or so. If there are other avenues of income, bring proof of that with you, too. The banker will be looking for consistency with a particular job or within the industry in which you are employed. This provides a level of security to the banker that the funds can and will be repaid, and that there is enough money coming in for you to afford the mortgage payments.

A solid credit score is a reflection of fiscal responsibility and consistency. This component is necessary for you to qualify for a mortgage. The better your credit score, the better the interest rate that is attached to a loan. If your credit score is below par, there are programs to help you improve your credit, and usually an increasing score can begin to reflect signs of improvement within a couple of years.