Job Time

• Lenders would like for you to be on your job for at least two years if you are going to be approved for a mortgage loan. If you have been on your job less than two years, lenders will consider the time on your previous job. Some lenders like to see that your current employment and previous employment are within the same industry. Longevity on your job shows stability and helps strengthen your application. This same requirement extends to business owners. Documentation is needed to show that they have been in business two years.
  
  

Debt Ratio

• You should not have a debt ratio higher than 40 percent (monthly debt/monthly income), because this could disqualify you from loan approval. Keeping your ratio below this figure will increase your chances of getting approved. The payments for your new loan should be comfortable to make. Before applying for a mortgage loan, you should pay down as much revolving debt as possible. This will also increase your credit score because you are increasing one of the categories that it impacts, your available credit.
  
  

Down Payment

• Get your down payment together. Having a down payment will also increase your chance of approval. The larger your down payment, the better rate you will receive. Some lenders require a 20 percent down payment. Down payments show more of a commitment on the part of the borrower.
  
  

Credit Score

• A lender will also take a look at your credit history. The minimum credit score, also known as a fico score, needed to qualify for a mortgage is 620. A FICO score is a statistic expressed as a number; lenders use this score to predict the chances of default on a loan. Scores range from 300 to 850 and the higher the score the better interest rate you will receive for your loan. A low rate of interest can save you a substantial amount of money in finance charges.
  
  

Reserves

• It's a good idea to have a significant amount of money saved up. Qualifying for a home can be a costly venture. Most lenders want you to have a reserve in your bank equal to 3 to 6 monthly payments.
  
  

Documentation

• To apply for a house loan, you will need documentation such as bank statements, a retirement income statement, lease agreements, tax returns and paystubs for verification purposes.