The main determining factor as to whether or not you qualify for a mortgage is your credit score. To be more specific, your “middle” credit score.

What most people don’t realize is that you actually have three credit scores. One score with each of the three main credit bureaus … Equifax, Experian, and Trans Union.

Your scores with these bureaus can range from as low as 300 to as high as 850.

When lenders review your credit scores, they’ll throw out your high score and your low score, and grant an initial “approval” based on your middle score.

Typical scores for the average person run in the mid to high 600’s. With scores in this range, it’s fairly simple to qualify for a mortgage. But scores are not a lenders only concern. Other important factors include:

1. Stability of employment: Most lenders will verify that you’ve been on the same job, or at least in the same field of work, for a minimum of 2 years.

2. Stability of income: Most lenders want to verify that you’ve had a stable income for a minimum period of 2 years.

3. Assets: Most lenders ask that you have liquid assets in an account such as a 401k or a checking or savings account, to cover at least 2 monthly payment amounts for the mortgage you’re applying for.

4. History of “On Time” payments: Most lenders will verify that you’ve made rent or mortgage payments “On Time” each month for the last 2 years.

You’ll notice I say “MOST LENDERS” … and that’s because “NOT ALL” lenders require you to meet these standards. A number of lenders, with less stringent requirements, will simply charge a higher interest rate to compensate for lesser standards.

The fact is, it’s actually easier to qualify for a loan now than ever before. Even with a past Chapter 7 or Chapter 13 bankruptcy, you may still qualify for a mortgage loan if you can meet some basic guidelines.

There are literally 100's of banks and lenders offering mortgage loans today and each competes with the others for business. The competition has inspired the creation of 1,000's of different loan programs. In the end though, it still comes down to one main issue ... your credit scores. 

The higher your scores, the more options you'll have available to you.

If your scores are low however, but you have compensating factors such as 1 and 2 above, it’s likely that you can still qualify for a loan. You might even be able qualify for a loan of as much as 100% of the purchase price.

I’ve spoken to many people who had no idea that even with past credit problems, it’s still possible to qualify for a mortgage if you find the right lender. If you’re serious about wanting to buy a home, the best advice I can offer is … talk to a mortgage broker.

You may be closer to becoming a homeowner than you think!