Four key factors dominate the financing requirements lenders want to know about before granting a home loan.  Three are related to the borrower - Credit, Income and Assets.  The fourth is the property itself.

The FICO (Fair Isaac Company) credit score is the foremost factor for borrowers.  Currently it is very difficult to find any lender willing do a home loan for someone with a score lower than 620.  The best rates and terms are available to borrowers with a 740 or greater score.

Borrower income is number two on the list.  We need to be  able to show a 2 year history (education in the career field will substitute) and be able to get a verification of employment that shows the on-going nature of the job.  When self employed, the history will need to come from tax returns and at least 2 years is a requirement.

Assets help strengthen a borrower's financial story when credit or income are weak.  The USDA loans require no assets and FHA only requires 3.5% down payment from the borrower (or family member loan/gift) so assets are not always required but they still emphasize the borrower's stability.

For property valuation an appraisal is used.  The appraisal compares the subject home to nearby homes that have recently sold and factors in adjuctments for size and condition differences.

The days are long gone when one could expect to get a loan with two or more of these four items missing or weak in the financial story.  Having all four in good shape assures the borrower we can get a loan for their purchase.