How Do You Qualify for a Home Loan?


Quick Answer

Conventional mortgages and government programs are the common options for a home loan. The conventional requirements are most stringent. A borrower must demonstrate financial viability, have acceptable credit score and make a 20 percent down payment.

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Full Answer

  1. Show adequate income

    A home loan application asks for asset, debt and income information. While lenders evaluate the complete picture of an applicant's financial health, they typically want to see a 38 percent debt-to-income ratio and a 28 percent mortgage-to-income ratio.

  2. Achieve an acceptable credit score

    The lender runs a credit report after a person applies. A minimum score of 580 is required by most lenders as of 2014, though the higher the score, the better the rates.

  3. Make a 20 percent down payment

    The standard down payment is 20 percent of the purchase price for a conventional loan.

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