If you are reading this, then you are probably planning to purchase a home. Congratulations! At The Snyder Realty Group, we are excited for you and want to help make the process smoother for you. With home-buying comes your mortgage, or the type of loan you use to buy a home. Before you start shopping for your dream home, it is best to learn as much as possible about getting a mortgage so that you are well prepared, confident, and excited about this wonderful time in your life!

The best way to save yourself from confusion and wasted time is to find a trustworthy lender to guide you through the steps and provide you with the best possible loan. Here are the main things lenders are looking for when working with you,

What Are Lenders Looking For?

Lenders look at a few different factors when determining what loan is best for you. These factors include the following:

  • Income and job history
  • Credit score
  • Debt-to-Income ratio
  • Assets
  • The type of property you wish to purchase

Income and Job History

Naturally, mortgage lenders need to consider your income when you apply for a loan. While you do not need to earn a certain level to purchase a home, the lender simply needs to know that you have a steady, reliable source of cash flow to pay back your loan.

Your lender will check out things like your employment history, your monthly household income, and any other forms of income you have, even things like child support payments.

Credit Score

After assessing your various sources of income, your lender will need to know your history of borrowing money. Your credit score plays a large part in your ability to acquire a mortgage. Having a high credit score lets your lender know that you not only make your payments on time but that you also do not have a pattern of borrowing too much money. A high score also gives you more access to lender options and lower interest rates.

Having a low credit score signifies that you may be a riskier borrower with a possible history of mismanaging money or missing payments. Typically, the minimum credit score needed for a conventional loan is 620, while the minimum score for a government loan is around 580. If your credit score happens to be low, try to boost your score for a few months before applying for the mortgage.

Debt-to-Income Ratio

Your debt-to-income ratio is another indicator that shows your lender that you have the needed cash flow to qualify for a mortgage.

Basically, your DTI is calculated by comparing your monthly debt from things like car payments and student loans against your gross monthly income. What DTI your lender looks for depends on the mortgage you are applying for, but 50% or less is the amount for a conventional mortgage.


One of the final things your lender will want to know about is if you have extra money in the bank or other places. This assures the lender that even if you encounter a period of financial trouble, you will still be able to make your payments. An asset is any account from which you can withdraw funds such as a savings account, retirement account, or any taxable investments.

What Type of Property Are You Looking to Purchase?

Different types of property will present different levels of risk to your lender.

If you are looking to buy a single-family home that you will use as your only residence, your lender will know that you are more likely to keep up with your payments since primary housing is usually already factored into people’s monthly budgets.

However, lenders may see an investment property as a potential risk. If the owner encounters financial hardship, they will focus on their primary housing first, leading to missing payments for the investment property. Providing a larger down payment and having a higher credit score is usually needed when seeking a mortgage for this type of property.

The Bottom Line

Purchasing a home should always be an exciting and positive experience. Knowing what your lender will assess gets you a step ahead in the process and will eliminate several unknowns.
This is the beginning of a new chapter in your life, and you deserve to have the right team and lender guiding you to the best mortgage possible. If you are trying to find the answers to get the right mortgage, contact us today. We are happy to answer any questions you have!