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Qualifying for a Home Mortgage

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If you are a first-time homebuyer or haven’t bought a home in a while, this document will offer valuable information about buying a home.

While pre-qualification is not a mortgage commitment or guarantee, it will provide guidance on what you can afford to spend on your new home. Having a pre-qualification letter to show to a seller demonstrates that you are a serious buyer. When you are ready to buy, it will shorten the time it takes us to complete the mortgage application process. Gather the information you will need to qualify for a home mortgage.

Remember that you are investing not just in a home but also in the mortgage loan that will finance your home.

How much money do you have saved for your Down Payment?

We will ask how much money you have available for a down payment. Required down payments can vary from as little as 3% to 5% of the purchase price or more. A larger down payment demonstrates your commitment to long-term homeownership and provides you with immediate equity in a new home.

What is your income and employment history?

  • What is your current income?
  • Are you employed?
  • Do you have a history of steady employment?

What does your credit history look like?

We will review your credit history — how well you’ve paid your bills in the past — by reviewing your credit report. We will consider how much you owe on credit cards, car payments, student loans and other debt. We will also review your ability to pay property taxes and other expenses of homeownership. There are minimum credit score requirements to qualify for a mortgage.

What kind of property do you want to purchase?

With your mortgage pre-qualification in place, you are ready to begin your search. A real estate professional can help you find a home that meets your needs and your budget. A licensed agent has access to the Multiple Listings Service (MLS) which generally offers the most comprehensive list of homes for sale in the area you would like to purchase.

Escrow Accounts

In most cases, we will require that you set up an escrow account. With an escrow account, you pay a fixed amount each month in addition to your mortgage payment to an account maintained by us. We will draw on that account to pay property taxes and homeowners insurance as those bills become due. Escrow accounts ensure that money will be available for these payments.