Requirements for a Home Mortgage

A down payment ranks as one requirement of a home loan with which borrowers sometimes struggle. Mortgage lenders want the borrower to invest cash into the home purchase to get approved for a loan to cover the rest. The common required minimum down payment for a standard mortgage loan (not backed by the government) stands at 20 percent, while government-backed Federal Housing Administration (FHA) loans may have less strict requirements.

For a home mortgage, you need a sufficient credit score -- a minimum of 730 if you want the lowest mortgage rates available for a standard non-FHA loan. According to Guy Cecala, publisher of "Inside Mortgage Finance," the average FHA borrower has a score of 690. FHA Commissioner David Stevens says buyers need a minimum score of 580 to be eligible for the FHA's 3.5 percent down payment program.

You also need consistent, long-term employment to get a home mortgage. The usual requirement is at least two to three years at the same job. The mortgagee (lender) needs assurance that you can keep a job and continue payments into the future. If you've just recently changed jobs, it may be best to wait until that two-year mark has passed before you start inquiring about a home loan.

The lender needs documented proof of all the statements you make regarding your borrowing ability, including pay stubs, credit reports and scores, and bank statements listing the balance of your current assets. The borrower signs a Uniform Residential Loan Application verifying all of this information as well as household expenses. You also need a home valuation from an accredited appraiser, proving the home's value matches or exceeds the selling price.