Mortgage Qualifying Checklist

Lenders need confidence you'll continue to receive the income that supports your mortgage payment. The standard is 2 years of stable income in the same field or career. Same employer is best, but job changes within the same field count as continuity.

Self-employed borrowers need 2 years of self-employment in the same business with consistent or growing revenue. New businesses, recent career changes, and recently-started commissions require additional documentation and may delay qualification.

Credit score minimums vary by loan program: 580 for FHA with 3.5% down, 620 for conventional and USDA, 640 for most state HFA programs, 700+ for best jumbo pricing. Beyond the score, lenders look at credit history — late payments, collections, bankruptcies, and foreclosures all affect approval.

Recent credit events have waiting periods: FHA allows new mortgages 2 years after Chapter 7 bankruptcy, conventional 4 years. Foreclosure waiting periods are 3 years for FHA, 7 years for conventional. Non-QM programs accept much shorter waiting periods at higher rates.

DTI is your total monthly debt payments divided by your gross monthly income. Conventional caps around 45-50%. FHA caps at 43% standard but can stretch to 50%+ with compensating factors. VA uses a residual income test instead of a hard DTI cap.

To improve your DTI before applying: pay off small debts entirely (a $5,000 credit card balance with a $150 minimum hurts DTI; paying it off helps significantly), avoid taking on new debt, and document any non-recurring debts that will be paid off before closing.

Beyond your down payment and closing costs, lenders want to see 'reserves' — additional savings that demonstrate you can survive a financial setback. Conventional typically wants 0-2 months of housing payments in reserves; jumbo and DSCR loans want 6-12 months. Investment properties typically require 6+ months reserves per property.

Reserves can be held in checking, savings, retirement accounts (typically 60-70% of vested balance counts), brokerage accounts, or stocks/bonds. Crypto generally does not count as reserves on most loan programs, though specialized Non-QM programs accept it.

Standard requirement is 2 years of employment history, but consecutive employment with one employer is not required. Job changes within the same field are fine. Recent graduates can sometimes use the school years toward the 2-year history with a degree directly relevant to current employment.

Gaps in employment require explanation. Gaps under 6 months are usually acceptable with a brief letter of explanation. Gaps over 6 months may require additional documentation of income stability after returning to work.

The property itself has to meet lender and loan-program requirements. Single-family homes are easiest. Condos require warrantability checks and FHA project approval. Manufactured homes have separate underwriting. Investment properties have stricter LTV and reserve requirements.

Appraisal value must support the loan amount. Property condition must meet program guidelines (FHA has specific Minimum Property Requirements; VA has Minimum Property Standards). Major repairs may need to be completed before closing or financed via a renovation loan like FHA 203(k).