How to Determine Your Mortgage Eligibility

Getting a mortgage is a key step toward homeownership. Before approving a loan, the lender assesses your eligibility: your ability to pay the mortgage on a sustained basis.

What is pre-qualification?

It's the process by which the lender estimates how much you could borrow, reviewing your income, debts, credit history, and assets. It gives you a realistic sense of your budget before you start house hunting.

Factors the lender evaluates

• Stable income: shows you can cover the monthly payments.
• Debt-to-income ratio: how much of your income is already committed to debt.
• Credit history: a good score improves your terms.
• Savings and assets: for the down payment and closing costs.

How to prepare

• Review and improve your credit score ahead of time.
• Reduce your debts to lower your debt-to-income ratio.
• Gather documents: proof of income, account statements, and tax returns.
• Save for the down payment and an extra cushion.

Preparing months in advance not only increases your chances of approval, it also gives you access to better interest rates.