What It Takes to Qualify For a Mortgage Loan

If you’ve been thinking about buying a home and believe that you have the ability to do so, the most important thing that you should determine before searching for the right home is if you would qualify for a mortgage loan. Since there are numerous types of mortgage loans available, you should be able to qualify for at least one of them.

How Much Loan Can I Qualify For Mortgage?

qualify for a mortgage loan

How Much Down Payment Is Needed

Mortgage loans can require anywhere from no down payment to a 5% down payment. When you pay a higher percentage of the cost of the home for the down payment, you’ll receive better interest rates and loan terms. The down payment that you’ll need to pay largely depends on the type of loan. For instance, VA and USDA loans don’t require any down payment if you qualify for them. FHA and 203K loans require a down payment of 3.5%. When looking specifically at FHA loans, the 3.5% down payment requirement applies to people with credit scores over 580. If your credit score is between 500-580, you would need to make a 10% down payment. As for conventional loans, the required down payment can range from 5-20%.

Qualifying Credit Scores

If you have a great credit score and a somewhat lengthy credit history, you should be able to qualify for practically any loan for your mortgage. For USDA and VA loans, the required credit score is 620 or above. FHA loans have the lowest requirement at 500 or above depending on the down payment. As for 203K and conventional loans, the minimum credit score requirements are situated at a score of 640. (Read on how to use a home for a loan collateral.)

Necessary Mortgage Documents

There are also a variety of documents that you’ll need to provide when applying for a loan, including W2s from the two previous years, an extensive list of debts and assets, bank statements for a few months, and several months of pay stubs. Once you’ve found a loan that you qualify for, make sure that you search for the best loan officers in Las Vegas to help you obtain the lowest interest rates.