For normal & govt mortgages on residential property, there are 4 key components to successfully qualifying for a loan: Debt-to-Income, Assets, Credit Profile, and the subject property itself.

• Debt-to Income (DTI): The ratio of loan applicants’ combined debt, existing housing expense, and proposed housing expenses TO their combined monthly income. This is the most important metric 80% of the time. See DTI page for more info.

• Assets: What you plan to put down (LTV) and what you plan to show you have in reserves.

• Credit: Your credit report, history, and scores. Credit scores (aka FICOs) are determined by the three credit bureaus: Experian, Equifax, and Transunion. Each bureau calculates their own score for you and lenders always take the lowest median FICO of all borrowers.

• Collateral (the property): The subject property itself. A 5yr old condo in a well-established complex that’s being purchased as your primary residence is a slam dunk. A 2-unit, manufactured duplex in a rural area with an unpermitted addition built 14” into your neighbor’s lot (aka Encroachment) is effectively ‘unfinanceable’ without private money.

Lenders will evaluate (aka underwrite) each of the four criteria above to come up with a wholistic picture of the file. Every loan product has it’s own rulebook for what is and is not acceptable. See List of Loan Types for more info.