How to Qualify for a Home Loan: Mortgage Requirements for 2025

So, you’re ready to buy a house. Or at least you’re thinking about it in between doomscrolling Zillow listings way out of your budget. The big question: how to qualify for a home loan without feeling like you’re jumping through endless financial hoops? Spoiler: It’s all about knowing the mortgage requirements ahead of time and setting yourself up for success. Let’s break it down.

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Buying a home starts with the right loan. MoneyLion helps you compare home loan options from top lenders, so you can find the best fit for your budget. Whether you’re looking to prequalify for a mortgage, secure a first-time home buyer loan, or explore investment property financing, we’ve got you covered. Enter your details to see personalized loan offers in seconds — no commitment required.

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Mortgage loan qualification factors 

Lenders don’t just hand out mortgages like candy. You’ll need to prove you’re a responsible borrower — aka, someone who won’t ghost them when it’s time to pay up. Wondering how to qualify for a mortgage? Here’s what they’ll check:

Requirements	Conventional loans	FHA loans	USDA loans	VA loans
Down payment	3%–20%	3.5%	0%	0%
Credit score	620+	500+ (10% down) or 580+ (3.5% down)	640+	No set minimum (but typically 580+)
Debt-to-income ratio	43% max	50% max	41% max	No set max (but usually under 41%)
Documentation for income and assets	Required	Required	Required	Required
Property type and purpose	Primary, second home, or investment	Primary residence only	Rural primary residence only	Primary residence only

Down payment 

The down payment is your upfront cash commitment. The magic number? Conventional loans typically require 3%–20% down, but government-backed options like FHA loans allow as little as 3.5% down (if your credit score is 580+). USDA loans and VA loans? No down payment required.

Tip: Set up an automated savings plan for your down payment — small, consistent deposits add up faster than you’d think.

Credit score

Your credit score is your financial report card, and lenders are the strictest graders. To prequalify for a mortgage, aim for at least 620 for a conventional loan. FHA loans are more forgiving, going as low as 500 if you can swing a 10% down payment.

Tip: Improve your score by paying bills on time, reducing credit utilization, and avoiding new debt before applying for a mortgage.

Debt-to-income ratio 

Wondering if you have the income required for a mortgage? The exact income you’d need varies by lender, but even more than that, it’s all about DTI.  Your DTI, or debt-to-income, ratio is how much debt you have compared to your income. Most lenders want it below 43% for home loan eligibility, but FHA loans may allow up to 50%.

Tip: If your DTI is too high, consider paying down credit cards or consolidating loans before applying.

Documentation for income and assets

Lenders love a paperwork moment — so expect to provide W-2s, tax returns, bank statements, and proof of assets. If you’re self-employed, brace yourself for extra scrutiny.

Tip: Keep a folder with all essential documents ready to speed up the application process.

Property type and purpose

Not all homes are treated equally in the eyes of a lender. The type of property you’re buying — and what you plan to do with it — can impact home loan qualifications, interest rates, and mortgage requirements. Whether you’re buying a primary residence, a second home, or an investment property, here’s what you need to know:

• Second home loan requirements: Dreaming of a vacation home? Lenders typically require a higher credit score (often 680+), a down payment of at least 10%, and a lower debt-to-income ratio compared to a primary residence. Second homes also have stricter income requirements to buy a house, as lenders want to ensure you can afford two mortgages.
• Investment property loan requirements: Buying a home to rent out? Expect stricter home loan requirements, including larger down payments (15%–25%), higher interest rates, and cash reserves (typically 6+ months of mortgage payments). Lenders see investment properties as higher risk because they aren’t owner-occupied — meaning you’ll need stronger finances to qualify.
• Multifamily home loan requirements: If you’re buying a 2–4 unit property, you may qualify for a residential mortgage — but lenders will want to see that you either live in one of the units (for better rates) or have strong rental income projections. FHA loans allow just 3.5% down on owner-occupied multifamily homes, while conventional loans may require 15%–25% down for non-owner-occupied properties.

Mortgage type

Not all mortgages are created equal. Here’s how they differ:

• Conventional loans: Best if you have good credit and a solid down payment.
• FHA loans: Great for first-time homebuyers or those with lower credit scores.
• USDA loans: For rural properties with income requirements to buy a house under specific limits.
• VA loans: A top pick for veterans and active military members, thanks to zero down payment.

Other mortgage qualification factors

Beyond the big-ticket items like credit scores and down payments, lenders look at a few other key factors before handing over the keys to your dream home. Here’s what else you need to know:

• PITI (Principal, Interest, Taxes, and Insurance): Lenders don’t just consider your mortgage payment — they look at the whole picture, including property taxes, homeowners insurance, and potential HOA fees. This is called PITI, and it needs to fit within your debt-to-income ratio.
• Private mortgage insurance: If your down payment is less than 20%, lenders require PMI, an extra fee that protects them (not you) in case you default on the loan. PMI typically costs 0.5%–1.5% of the loan amount per year, and it can be removed once you hit 20% home equity.
• Closing costs: Even after you’ve saved for a down payment, you’ll need extra cash for closing costs, which cover loan origination fees, appraisals, title insurance, and more. These fees typically run 2%–5% of the home’s price — so on a $300,000 home, expect to pay between $6,000–$15,000.

Your Mortgage Game Plan Starts Here 

Navigating home loan qualifications might feel like decoding an ancient riddle, but once you know the mortgage requirements, the path gets clearer. Whether you’re a first-time buyer wondering how to qualify for a first-time home buyer loan or a seasoned pro aiming to maximize your approval odds, it all comes down to smart financial prep — solid credit, manageable debt, and proof that you can handle those monthly payments.

Now that you know what lenders are looking for, it’s time to take action. Check your credit score, start stashing away for that down payment, and compare loan options to find the best fit. With the right moves, you won’t just be prequalifying or qualifying for a mortgage — you’ll be holding the keys to your new home before you know it.

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