Mortgage Pre-Qualification

Demonstrate Stable Employment and Income

Lenders prioritize consistency. A steady work history is one of the clearest indicators of your long-term ability to make mortgage payments.

Minimum Work History:

Lenders will typically require a minimum of two years of work history in the same field or line of work. While career moves within a field are generally fine, large gaps or sudden industry changes may require additional explanation.

Proof of Employment and Income:

To verify this, be prepared to provide:

• The Most Recent Paystubs: Usually covering the last 30 days to verify your current income.
• Verification of Employment (VOE): Your lender will contact your employer directly to confirm your current job status, salary, and likelihood of continued employment.

Two Years of Filed Tax Returns: Lenders use your last two years of filed and accepted IRS tax returns to confirm your annual income, especially if you have variable income, bonuses, or are self-employed. They often look at the adjusted gross income (AGI).

Prepare Your Down Payment Funds

Bank Statements:

You will need to provide bank statements (usually for the last 60 days) for all accounts showing the source and history of your down payment and closing cost funds.

Source Verification:

Large, recent deposits that are not regular income must be explained. Funds can often come from sources like:

• Savings and Checking Accounts
• Investment or Retirement Accounts
• Gift Funds: If a family member is providing a gift, a formal gift letter and proof of the transfer will be required.

Down Payment Range:

Down payment requirements vary significantly based on the loan type:

• VA Financing (for Veterans/Service Members): As little as zero down for qualified borrowers.
• FHA Loans: Often require around 3.5% down.
• Conventional Loans: Can start at as low as 3% or 5% down, with 20% down being the benchmark to avoid Private Mortgage Insurance (PMI).
• Non-Owner Occupant/Investment Property Financing: Typically requires a larger down payment, often up to 20% or 25%.

Understand Your Credit Card Score Requirements

Your credit score is a vital factor, reflecting your history of managing debt. It directly influences the loan programs you qualify for and the interest rate you receive.

Minimum Credit Score:

A minimum credit score is required, but this number changes based on the specific loan program you are applying for.

• For many Conventional Loans and VA Loans, a minimum score is often around 620 or higher.
• For FHA Loans, the minimum can be lower, sometimes 580 or even 500 with a larger down payment.

Aim for a Higher Score:

While minimum scores get you qualified, a score of 740 or higher often unlocks the most favorable interest rates and best terms, saving you thousands over the life of the loan.