Credit scores, debt-to-income ratios, employment history, and asset requirements — here's exactly what lenders look at and how to position yourself for approval.
What Lenders Actually Look At
Mortgage qualification boils down to four pillars: credit, income, assets, and collateral. Understanding what lenders are looking for in each category — and how to optimize your profile — is the difference between a smooth approval and a frustrating decline.
Credit Score Minimums by Program
| Loan Type | Minimum FICO | Ideal FICO |
|---|---|---|
| FHA | 580 | 640+ |
| Conventional | 620 | 720+ |
| VA | 580–620* | 680+ |
| USDA | 640 | 680+ |
| DSCR / Non-QM | 620 | 700+ |
| Jumbo | 700 | 740+ |
*VA has no official minimum; lender overlays vary.
Debt-to-Income (DTI) Ratios
Most conventional programs allow a maximum back-end DTI of 45–50%. FHA allows up to 57% with compensating factors. The lower your DTI, the better your rate and terms. Key strategies to reduce DTI: pay down revolving debt before applying, avoid taking on new debt (car loans, credit cards) during the mortgage process.
Employment and Income Documentation
W-2 employees: 2 years W-2s + recent pay stubs. Self-employed: 2 years business and personal tax returns. Commission income: 2-year average used. If you're recently employed after a gap, most programs require 30 days of pay stubs and a written VOE.
Want to know exactly where you stand? Get a free pre-qualification from Nicholas Menard — we'll tell you exactly what you qualify for and what to do to maximize your purchasing power.Nicholas Menard
NMLS #202425 · Senior Loan Officer
Nicholas Menard is a senior loan officer at Edge Home Finance specializing in DSCR investor loans, first-time buyer programs, and refinancing strategies for Florida homeowners and investors.
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