Income Verfication

• Income amounts and sources must all be verified as part of the mortgage qualification process. Common items used to very this information can be paycheck stubs, W-2 forms, bank statements and income tax returns.
  
  

Debt and Credit

• The amount of debt an applicant has is very important to a lender when reviewing the file for mortgage qualification. A loan officer and loan underwriter verifies credit and payment histories as part of the qualifying process.
  
  

Credit Scores

• A credit score does have a direct impact on a financing a home. When using certain loans, higher credit scores will result in lower interest rates. However, low credit scores can result in a loan denial.
  
  

Reserves

• Have available funds to show the lender that you have the amounts needed to close on the property and pay the expenses associated with this. Most industry experts recommend at least five percent of the purchase price of the property in the bank to show stability to a lender.
  
  

Considerations

• Mortgage qualification takes a significant amount of due diligence from a home buyer. Underwriters require significant amounts of documentation surrounding your finances to approve a mortgage; be prepared to provide all documents in a timely manner.
  
  

Expert Insight

• Prior to applying for a mortgage with a lender, check your credit history and reserves to ensure that you are in the best financial position to purchase a home. If you have questions on recent changes to any qualifying guidelines, discuss this with a mortgage banker.