How to Qualify for a Mortgage

A down payment and good credit are needed when qualifying for a mortgage.

There are lots of misconceptions when it comes to both real estate and finances. Put them together and it’s like trying to understand multivariable calculus. When it comes to qualifying for a mortgage, many are unsure of the process. Demystify the mortgage qualifying process with this guide.

In order to buy a house, you need to do two things: you need to make a down payment, and you need to have good credit.

Down Payment.

Most people overestimate the down payment when looking to buy a new home. A recent study found that a majority of perspective home buyers believe that a 20 percent down payment is required to buy a home. While that may have been true in years past, that’s no longer the case. There are, in fact, many different types of loans, some of which allow you to put as little as five percent down. So that new home may be more obtainable than you once thought!

Good Credit.

In order to qualify for a loan, you need to have good credit. But there’s quite a bit of confusion when it comes to what is considered a good credit score. In fact, many overestimate what a good credit score should be. An Ipsos survey found that a majority of people think a score of 780 is a good score. While it is a good score, you can still qualify with a credit score less than that. The average loan was given with a credit score of 722.

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