The Most Important Part Of A Mortgage App???

Contrary to what most people think, your credit score isn’t the biggest factor in your mortgage application. At least, not to the extent people assume. If you’re getting ready to buy a home soon, it’s way more important to understand where to actually focus your energy so you can put yourself in the best position to qualify and close.

To do that, you’ve got to understand the key parts of the mortgage application, how much weight they carry, and what they actually do. The main components are income, debt, credit, and assets. Of course, there are more detailed questions and paperwork involved, but when it comes to getting approved and figuring out how much you can afford, these four are the real drivers.

Now, out of all four, income is by far the most important. Why? Because your income determines the size of the loan you qualify for — it’s that simple. More income equals a bigger loan. Less income equals a smaller loan. You could have an 850 credit score and still not qualify for anything if you have no income. That’s the part most people overlook.

The second major factor is debt. This goes hand in hand with income. The bank doesn’t care how much total debt you have — you could owe $100,000 — but what they do care about is how much your monthly payments are. That’s what gets subtracted from your income when calculating how much home you qualify for. This is your debt-to-income ratio, and it’s a core piece of the puzzle.

Then we get to credit. This one gets the most attention online, but in reality, it only influences two things: what loan programs you qualify for and your interest rate. That’s it. It doesn’t tell the lender how much house you can afford or whether you’re financially stable — it just helps determine which loan buckets you fall into. So yes, it matters, but not nearly as much as people think.

Lastly, we’ve got assets, which refers to your money for the purchase — specifically your down payment and closing costs. If you’re a first-time buyer, the minimum down payment is usually around 3% to 3.5%. Closing costs can range from 3% to 4% of the purchase price. So for a $600,000 home, you’re looking at roughly $36,000 total. That sounds like a lot, and it is — but the good news is there are down payment assistance programs that can help cover a big chunk of that. Plus, you can often negotiate with the seller to cover some or all of the closing costs through credits.

So yeah, saving up $36,000 can take a long time, but getting help with that part is often possible. On the other hand, increasing your income by $1,000 or $5,000 a month consistently? That’s a lot harder to do. Which is exactly why income is still the most important part of the mortgage application. You can find ways to solve for everything else — but income is the foundation the rest is built on.