To determine home purchase qualification, review your credit score, calculate debt-to-income ratio, assess savings for a down payment, and verify stable employment. Obtain a credit report from agencies like Experian or Equifax to ensure accuracy. Lenders typically require a score of 620+ for conventional loans. Next, compute your debt-to-income (DTI) ratio by dividing monthly debt payments by gross monthly income. Most lenders prefer a DTI below 43%. Save for a down payment of at least 3-20%, depending on the loan type. Government-backed loans like FHA or VA may offer lower requirements. Secure pre-approval from a mortgage lender to understand your borrowing capacity and strengthen your offer.

The criteria ensure lenders assess your ability to repay while minimizing default risk. A 2023 Federal Reserve report found that 62% of U.S. homebuyers with DTIs exceeding 43% were denied mortgages, highlighting the ratio’s critical role. Credit scores below 620 correspond to 28% higher denial rates, per Experian data. A 20% down payment reduces loan default risk by 50%, as shown by the Consumer Financial Protection Bureau. Lenders also prioritize stable employment, as 75% of rejected applications stem from inconsistent income history, according to the National Association of Realtors. Pre-approval shortens home search times by 40%, per Redfin, and increases offer acceptance likelihood by 30%. These factors collectively balance lender risk and buyer affordability, ensuring sustainable homeownership.