Qualifications for first-time homebuying mortgages
If you’re looking to buy your first home, there are a few things to keep in mind when applying for a home loan. Each type of first-time homebuying mortgage has specific requirements, but here are some general qualifications to consider:
Your credit score measures your ability to repay your debt and ranges from 300 to 850. A higher score shows you’re more likely to make your monthly mortgage payments on time and can improve your approval chances. However, you don’t need a perfect score or a credit score at all. Credit scores as low as 540 may qualify for some first-time homebuyer loans. Homeownership is also possible with our Complete Rate program. The program analyzes consistent income deposits and payments, including rental payment history, to provide a better interest rate to customers with no traditional credit score.
Income and employment
When you apply for a mortgage, you must show you have a reliable way to make your monthly payments. Providing details about your employment history and income by submitting pay stubs, tax returns and proof of employment can help confirm that you’re a dependable borrower.
Debt-to-income ratio (DTI)
Your debt-to-income ratio (DTI) compares monthly debt obligations to gross monthly income. Why does this number matter? Your DTI ratio is a key indicator of your financial health and how much home you can afford.
Did you know you don’t need to put 20 percent down on a home to qualify? Typically, first-time homebuyer programs offer zero and low down payment requirements, so you won’t have to worry about saving up a substantial amount of money upfront. To see how the amount of your down payment affects the affordability of your monthly mortgage payment, try out different scenarios with our mortgage payment calculator.
Savings and assets
The amount of cash you’ve saved shows your ability to manage loan payments, pay closing costs and cover unexpected expenses.
These are general qualifications. Connect with a loan officer to learn more about the first-time homebuyer loans that may suit your financial situation.