Employment and income history

• What is your place of employment?

• What is your gross annual income? (You are expected to provide proof of income. This can include, but is not limited to paystubs, W2s, 1099s, and tax returns.)

• How long have you been employed? (Lenders will check how long you have been employed in your current position in addition to your employment history for the last 2 years.)

• How are you paid? (Lenders will check to see how your income is broken down. Is it primarily your base wages? Do you receive commission, overtime, or bonuses? If you are self-employed? How do you file your taxes?)

What is advantageous: Having a steady employment history for the past 2 years.

What makes things tougher: Being self-employed or having unstable income and employment history over the last 2 years.

Debt

• What debt do you carry month-to-month? Monthly debts include car payments, alimony or child support, student loans, credit cards, and personal loans.

What is advantageous: If your total monthly debts (including your mortgage payment) amount to 36% or less of your gross income. It also helps if you have not opened any new debts right before applying for a mortgage.

What makes things tougher: Having credit cards with high credit balances, monthly debts accounting for greater than 36% of your gross monthly income, recent credit cards being opened, or large credit lines that are not being utilized.

Assets and savings

• Are these primarily liquid funds, such as in a checking or savings account, or are they investment funds, like 401(k), stocks, or mutual funds?

• Do you have additional funds left over after closing to account for financial reserves?

What is advantageous: Showing proof that after closing, you have enough money left over for 2 or more mortgage payments. This is to account for reserves should you suffer a lack of employment or income for a period of time after closing on the loan. 

What makes things tougher: Having no money left over after closing on the mortgage.

Down payment saved

• How much of a down payment do you have saved or are wanting to put down on the home?

• Where are the funds for the down payment coming from?

• Are these your own funds, or are they a gift from a relative or family member?

• You will have to document these funds by providing copies of financial statements. 

What is advantageous:  The down payment comes from a liquid account (that you own) and you are putting more than 20% down on the home.

What makes things tougher: You are not able to document where your down payment funds came from.

Loan purpose

• Is the mortgage needed to purchase a new home or to refinance a current mortgage?

• If you are refinancing, are you wanting to take equity out of your home with a cash-out refinance, or just lower your rate and/or term?

What is advantageous: The loan is for a new home purchase or a rate and term refinance.

What makes things tougher: You are taking a cash-out refinance.

Use of property

• What is your intended occupancy of the property?

• Year-round primary residence

• Vacation home

• Investment property

What is advantageous: Using the property as a primary residence.

What makes things tougher: Keeping the property as an investment.

Property type

• What type of property do you own or are looking to purchase?

• Single-family home

• Condo

• Townhome

• Duplex, triplex, quadplex

What is advantageous: Single family homes.

What makes things tougher: Duplex, triplex, quadplex, and condo properties that come with additional underwriting requirements.

Co-borrower information (if applicable)

• Are you applying by yourself, or with a spouse or other co-borrower?

• If applying with someone other than yourself, they will also be required to provide financial and credit documents.

• If a co-borrower is not needed to qualify, it is often best not to apply jointly. They can still be listed on the deed of the home, but removing them from the mortgage can make the process much simpler (and require less documents!).

What is advantageous: Adding a co-borrower with a strong credit, employment, and income history.

What makes things tougher:  A co-borrower with a subpar history of credit, employment, and income.

Closing timeframe

• How soon are you looking to move into your new home or close on your refinance?

What is advantageous: Most lenders can accommodate a reasonable timeframe to meet your desired closing date.

What makes things tougher: If you are looking to close in less than 30 days, you would be best suited to have all of your documents prepared prior to application.