Get mortgage ready

A lender checks four things before they say yes to a mortgage: steady income, climbing credit, a low debt load, and cash in the bank. Build all four and the door opens. Start with income.

A lender wants proof your money shows up and keeps showing up. The rule of thumb is about 2 years in the same line of work.

Two years in the same field counts, and it does not have to be the same seat. Job changes inside the same line of work are fine. A warehouse worker who moves to a better warehouse still counts. What worries a lender is an unexplained gap: a long stretch with no work and no reason written down.

Treat stability as a practice you keep. You build it week by week. Protect your hours. Keep every pay stub. Keep your last two tax returns somewhere safe. Side income counts too, but only when you can document it. Cash jobs nobody wrote down will not help you at the desk. So if you drive or sell on the side, keep the records. The money will count later.

Your credit score is a number from 300 to 850 that tells a lender how you have handled borrowed money. For a home loan, scores climbing through the middle 600s start opening doors. The higher you go, the cheaper the loan gets over the years.

Here is the part people miss: the direction matters as much as the number. A 640 that has climbed for a year reads better than a 700 that just slid. Lenders want to see a line pointing up.

Building credit from zero? The same habits that start a score keep it climbing: pay every bill on time, keep your card balances low, and let time do the slow work. A secured card is a common first rung on that ladder. The on-time payments you make on it are the same reps a lender wants to see.

DTI stands for debt-to-income, and it is simpler than it sounds. Add up your monthly debt payments. Divide by your monthly income. That is the slice of your pay already promised to someone else.

Lenders like to see that slice under about 43 percent. Under that line, they trust you can carry a house payment on top of what you already owe. Debt payments means set monthly amounts you owe: a car loan, credit card minimums, a student loan. Rent and groceries are bills, but they do not count as debt payments in this math.

The less debt you carry, the more house your income can hold. You also get more room to breathe after you buy. Pay a card down before you shop for a home. It is one of the fastest ways to lift how much a lender will trust you with.

Buying a home takes three piles of cash. Count them one at a time.

First, the down payment: the money you put in up front. For a first home this is often 3 to 5 percent of the price, never only 20.

Second, the closing costs: the fees to finish the deal, from the lender, the title company, and taxes. Plan on about 3 percent of the price.

Third, the pile people forget: your emergency stash has to stay alive after you buy. Do not drain it to close. The day you own a home is the day surprises get more expensive, a dead water heater, a leaking roof. You want cash still standing when they come.

So the real target is down payment plus closing costs plus a stash that survives the purchase. Save toward all three, and keep that third pile whole.

A pre-approval is a free letter from a lender that says what they would lend you. Think of it as your shopping tool. It tells you your real price range before you spend a single Saturday looking.

Get it before you fall for a house. Walk into a place you love with no letter and you are guessing. Walk in with one and you know exactly what you can carry. You never lose a weekend on something out of reach.

And it does not commit you. The letter does not tie you to that lender or that loan. You can shop it around, and you can walk away. It works for you, and it costs nothing.

You do not have to figure any of this out alone. A free HUD-approved housing counselor will walk through all of it with you, with no sales pitch, at 800-569-4287.