Lenders look at two things when determining if you are able to qualify for a home loan: your ability to repay the loan and your willingness to repay it.

Ability to repay
The first thing that a lender wants to know is if you are able to repay the loan for which you are applying. The lender looks at your current employment. Have you been in the same job for at least two years or at least the same line of work for a few years? This shows the lender that you have steady employment, and it’s a great plus in qualifying for a home loan.

The lender also looks at your total income and compares it to your debts, adding in your proposed monthly mortgage payment. You must have sufficient income to comfortably make these payments. This reflects your ability to repay the loan when qualifying for a home loan. If the lender believes your debt load is too high, you will qualify for a smaller loan and likely be charged a higher interest rate. Therefore, it makes sense to pay off as much debt as possible before applying for a home loan.

Willingness to repay
The next step in qualifying for a home loan is determining your willingness to repay the loan. Lenders determine this by looking at how you have paid off debt in the past, and it is one reason why lenders check your credit report. If you have faithfully made on-time payments toward your past debts, it helps you when qualifying for a home loan. The lender also looks at how you intend to use the property that you are buying. If you plan to live there, it is more likely that you will repay the loan.