If you’re dreaming of a new home, the first big hurdle is getting the mortgage approved. It can feel like a maze, but you don’t need to be a finance wizard to make it through. In this guide we break down the exact things lenders check, the mistakes that slow you down, and the quick actions that can push your application over the finish line.
First off, lenders want to see that you can comfortably pay back the loan. They measure this with two main numbers: your income ratio and your credit score. The income ratio compares your monthly debt (including the new mortgage) to your gross monthly income. Most banks aim for a ratio under 36%, but some will stretch to 45% if other factors look good.
Your credit score is the second pillar. A score above 700 usually lands you better rates and a smoother approval. If your score is lower, expect higher interest or a request for a larger deposit. Lenders also peek at your employment history – two years in the same job is a strong signal of stability.
Beyond the numbers, banks will ask for proof of savings, a down‑payment source, and sometimes a ‘letter of explanation’ if you have gaps in employment or a recent credit inquiry. Having those documents ready saves you from back‑and‑forth emails.
1. Get your documents organized early. Pull together recent payslips, tax returns, bank statements, and a list of all debts. Put them in a single folder, either digital or paper, so you can upload them in one go.
2. Check your credit report before you apply. Request a free copy from the major bureaus, spot any errors, and dispute them. Even a small correction can lift your score by a few points.
3. Save a bigger deposit. The more you can put down, the less risk you look to the lender. A 20% deposit often removes the need for private mortgage insurance, which cuts your monthly cost.
4. Reduce existing debt. Pay off credit‑card balances or personal loans before you apply. Lower debt not only improves your income ratio but also shows lenders you can manage finances responsibly.
5. Choose the right lender. Some banks are stricter, while credit unions or online lenders may have more flexible criteria. Compare their requirements and ask a few questions about their approval timeline.
Finally, be honest. Inflating income or hiding debts can get you flagged later, and the fallout is far worse than a simple denial.Getting a mortgage approved isn’t magic, it’s about presenting a clear, honest picture of your financial health. Follow the steps above, stay organized, and you’ll move from “maybe” to “yes” faster than you thought possible.
