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Will You be Approved to Buy a House? Here’s Your Checklist!

Nathan Rich

By Nathan Rich

Loan Officer at The Wood Group of Fairway, a Texas mortgage lender

 

There’s a lot of assumptions made about buying a house. Do you have to make a 20% down payment with a 700+ credit score? Here’s what you really need for home loan approval.

 

  1. Credit Score

If you’re a first-time buyer (or haven’t bought a home in the last three years), you can be approved for a home loan with a credit score as low as 580. VA loans, for veterans and active service members, require a credit score of 620.

 

An excellent credit score of 750+ will help lower your interest rate, but it’s certainly not a requirement.

 

  1. Debt-to-Income Ratio

Mortgage lenders like to see your debt-to-income (DTI) ratio at 55% or lower. That means your monthly debts should equal 55% of your monthly income.

 

What do lenders count toward your debts? Here are some common debt sources:

 

  1. Down Payment

First-time buyers are only required to put 3.5% down with the FHA loan program. Veterans and rural-area borrowers may qualify for 0% down. A conventional loan requires 20%, and is typically used by repeat homebuyers.

 

Down payment assistance programs are also available. Some programs can give you as much as 6%, and you never have to pay it back. 

 

What do You Qualify For?

What mortgage options do you qualify for? Bryan/College Station’s highest-rated lender is ready to help. Let’s get started today!