What Do I Need to Get a House Loan?

You'll need proof of employment to get a house loan.

Getting a loan to buy a house requires a few initial steps. Being aware of the state of your finances, as well as making smart financial decisions before you get a loan, will make the lending process easier.

Employment

You will need a job before you can get a house loan. Some banks require that you be at your current job for a certain period of time before they will lend you money to buy a house.

Mortgage to Income Ratio

You must have enough income so that your mortgage payments, plus homeowner's insurance and real estate taxes, will not exceed 28 percent of your gross income, according to the Yahoo! Finance Guide.

Debt to Income Ratio

You will need to have paid down your total debt (including an estimated monthly mortgage payment) to equal less than 36 percent of your monthly gross income. This may include paying off credit cards, car loans or student loans.

Down Payment

Most lenders will require you to have enough cash to make a 10 to 20 percent down payment on a home before they will give you a loan. Factor in closing costs and homeowner's insurance costs into the final purchase price before computing your down payment.

Prequalification

Lenders may require you to fill out a pre-qualification application before lending you money for a home. This is an analysis of your income and debt status that allows banks to make an estimate of how much money they would be willing to lend you before you decide on a house.

References

• Yahoo Finance: Mortgage Basics
• Home Loan Learning Center: Mortgage Basics