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Evaluating Your Financial Situation

The first step towards securing a mortgage is to thoroughly evaluate your financial situation. Lenders typically look at several key factors, including your credit score, debt-to-income ratio (DTI), and employment history. A good credit score is crucial as it influences the interest rates you'll qualify for. Aim for a credit score of at least 620, although higher scores can lead to better rates¹.

Your DTI ratio is another critical component. This ratio compares your monthly debt payments to your income, and lenders generally prefer a DTI ratio of 36% or lower². Reducing your debt or increasing your income can improve this ratio and make you a more attractive candidate for a mortgage.