Home buyers and mortgage shoppers tend to have a lot of questions about mortgage qualification guidelines, rules and requirements. In short, they want to know: What does it take to qualify for a mortgage loan in 2019?
In the past, those answers were hard to come by. The mortgage industry wasn’t known for its public outreach or consumer education efforts. It’s a business after all, and businesses tend to focus on marketing and profit.
That’s where we come in. Since 2010, QualifiedMortgage.org has been educating home buyers and mortgage shoppers in the U.S. about mortgage qualification guidelines, lending practices, and industry trends. We closely monitor the lending industry and report key trends and developments, right here on our website.
Overview of Mortgage Qualification Guidelines in 2019
The summary below will give you a basic understanding of current mortgage qualification requirements in the U.S., as of summer 2019. You can follow the links to find in-depth information on each topic.
Mortgage loan requirements have eased over the past few years. As of 2019, we are seeing borrowers qualify for home loans with higher debt-to-income ratios and lower credit scores (compared to five or six years ago).
Additionally, conventional mortgage loan programs with down payments as low as 3% have become more common. This is one of the key changes that has occurred over the past few years.
Traditionally, the FHA loan program was one of the only options for borrowers seeking a down payment below 5%. But that has changed. In 2019, many conventional (non-government-backed) mortgage products offer down payment as low as 3%.
This is mainly because Freddie Mac and Fannie Mae — the two corporations that purchase home loans from lenders — are now willing to purchase mortgage products with a loan-to-value (LTV) ratio up to 97%. Conversely, this means borrowers using these products can put down as little as 3%.
This is good news for home buyers seeking a mortgage program with a relatively low down payment.
Household debt levels are another mortgage qualification requirement that appears to have eased over the past few years. On average, borrowers today are qualifying for home loans with higher levels of debt. Mortgage lenders refer to this as the debt-to-income (DTI) ratio.
Featured Articles for Borrowers
We publish new content on a regular basis. Most of it is geared toward home buyers and mortgage shoppers. You can always find out latest articles in the right-hand sidebar area. Here are some featured articles we recommend reading, for starters.
Student Loan Debt and Mortgage Approval
In recent years, student loan debt has become a major issue in the U.S. It can also be a problem for home buyers who need to use a mortgage loan to finance their purchases. This article explores the different ways student loan can affect the mortgage qualification process.