To qualify for a home purchase, individuals must demonstrate stable income, a credit score of at least 620, a down payment of 3-20%, and a manageable debt-to-income ratio. Lenders evaluate these factors to assess repayment capacity. A credit score above 620 is typically required for conventional loans, while scores below 580 may qualify only for government-backed loans with higher fees. A 20% down payment minimizes mortgage insurance costs, though options like FHA loans allow 3.5% down. Income must meet lender criteria, often requiring a debt-to-income ratio below 43% (Federal Housing Finance Agency, 2023).

The importance of these factors stems from risk mitigation for lenders and affordability for buyers. A credit score of 620+ reduces default risk, as higher scores correlate with lower delinquency rates (Federal Reserve, 2022). For example, 72% of conventional loans require scores above 620, while FHA loans accept 580+. A 20% down payment covers loan principal and interest over 30 years, avoiding private mortgage insurance (PMI), which costs 0.5-1.5% annually (Consumer Financial Protection Bureau, 2023). Lower down payments increase loan amounts, raising monthly payments and interest burdens. Income stability ensures consistent repayment, while a debt-to-income ratio below 43% aligns with Fannie Mae’s conforming loan standards, ensuring the borrower can handle additional debt. Data from the National Association of Realtors (2023) shows 63% of first-time buyers relied on mortgages, with 68% of lenders prioritizing DTI ratios during underwriting. Thus, meeting these criteria balances lender risk and buyer affordability, facilitating homeownership.