Credit Score & History

• Although credit is not the only factor lenders consider when reviewing your loan application, it is the most important factor. The stronger and more sound your credit score and history, the better your interest rate and loan terms.
  
  

Income-to-debt Ratio

• Lenders require that your income-to-debt ratio reflect that you can afford the home, even with a perfect credit score. Most lenders look for an income-to-debt ratio of 28 percent or less, which means that your monthly mortgage payment should account for no more than 28 percent of your monthly gross income.
  
  

Downpayment & Closing Costs

• The purchasing process generally requires a down payment and payment of closing costs and fees. These fees can be paid with funds that you have saved or with grants that may be available to you.
  
  

Homeowner's Insurance

• Lenders require that you protect your investment, and their investment, by purchasing homeowner's insurance. The lender generally requires that the policy become effective no later than the loan's closing date.
  
  

Home Appraisal

• Lenders want to ensure that the home is worth the money they are lending. Most lenders will require an appraisal that reflects the selling price of the house before finalizing your loan's approval.