What You Need to Qualify for a Home Loan
Qualifying for a home loan means proving to lenders that you have what it takes financially to make the commitment to paying for a home over a period of years.
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Good Credit
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A home is a big investment, one you will likely pay for over a period of 15 to 30 years. Lenders like to see that you have been diligent about paying other debts in the past to ascertain your likelihood of paying off a home loan. Qualifying for a home loan is difficult if your credit score is low, or if you've had a bankruptcy or foreclosure in the past ten years.
Steady Income
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Making your mortgage payment is difficult without a steady source of income. "Lenders want to see two years' worth of tax forms, as well as your most recent pay stubs" to verify your income, says MSN Money's Liz Pulliam Weston.
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Down Payment
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Although lenders were once willing to make home loans without a down payment, those days are over for most financiers. A down payment of at least 10 percent of the home's purchase price is a standard to qualify for most mortgages, although FHA mortgages and other special mortgage programs may require a lower percentage.
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