Steady documented income, a credit score a program will lend on (580 for FHA, around 620 for most conventional loans), enough cash for the down payment and closing costs, a debt load that leaves room for the new payment, and a pre-approval letter before you look at anything seriously.
A lender is answering one question: will this person make this payment for thirty years. Everything on the checklist is evidence for that, which is why the list is short and why the documents are the same everywhere.
What the lender asks for
Gather these once and the process is days rather than weeks. Every one of them will be asked for twice, so keep them somewhere you can resend.
- Two years of W-2s or tax returns, and the last two or three pay stubs. Self-employment means two years of returns and often a profit and loss statement.
- Two months of statements for every account holding the cash, all pages, including the blank ones.
- An explanation and a paper trail for any deposit that is not payroll. A gift needs a letter saying it is a gift and not a loan.
- Photo identification, and the contract once you are under one.
The numbers underneath
Credit score sets which programs are open: 580 opens FHA at 3.5 percent down, 620 is the usual conventional floor, and the rate improves in steps up to about 760. Debt to income is the other gate: most loans want the total monthly debt including the new payment under about 43 percent of gross income, though automated underwriting stretches that with strong reserves or a large down payment.
Employment history matters more than the number on the offer letter. Two years in the same line of work is the standard, and a job change within the same field rarely causes a problem while a change of industry sometimes does.
What you do not need
You do not need 20 percent down, you do not need to be free of student loans, you do not need a perfect score, and you do not need an agent, though most buyers use one. You do need a pre-approval before making an offer, because a seller comparing two offers reads it as the difference between an intention and a plan.
Questions people ask
What documents do I need to buy a house?
Two years of income documents, two months of asset statements, identification, and explanations for any large non-payroll deposit. The contract and the insurance binder join the file once you are under contract.
Do you need a job to buy a house?
You need documented, stable income, which is usually a job but can be self-employment, retirement income, disability, or rental income. What lenders will not use is income they cannot document for two years.
How long does pre-approval take?
A few days once the documents are in, and it is normally good for 60 to 90 days. Getting one before you look is the difference between shopping and browsing.