Mortgage Loan Frequently Asked Questions
What information do I need to provide to qualify for a mortgage?
Mortgage lenders want to better understand both your current financial situation and your financial history when evaluating your ability to qualify for a home loan.
Typical information you'll need to provide during the mortgage application process includes:
The amount of the down payment you can afford
A summary of your debts
A list of your assets
What type of credit score do I need to secure a home loan?
As a rule of thumb, those with stronger credit scores will have access to better mortgage rates. This policy is the same for any type of loan. While different factors go into a mortgage lender's decision to approve you for a loan, you'll typically need a credit score of 640 or higher to be approved for a home loan.
How much should I save for my down payment?
The typical recommendation for a down payment is at least 20% of the cost of the home. Providing less than 20% could mean that additional fees will be added to your monthly mortgage payment. You will also likely be required to purchase private mortgage insurance (PMI) to cover the cost of your loan in case you default on your payments.
What debt-to-income ratio should I have when applying for a mortgage?
When considering your debt-to-income ratio, you should try to keep it at 45% or lower to qualify for a home loan. However, other factors such as your credit score, down payment, and calculated monthly mortgage payment will also be considered when you apply.