• If you are financially prepared, you can shoulder the responsibility of a mortgage.Hipoteca 2 image by Nuka from Fotolia.com
  
  A mortgage is a large financial commitment and borrowers who do not meet the financial requirements will find it hard to qualify. Lenders need to be sure you can pay your mortgage, without fail, every month. If you know the basic requirements, you will be able to modify your finances to put yourself in the best possible position to get a mortgage loan.
  
  

Income

• Lenders look at your income to determine whether you have enough money to pay off the loan. Borrowers with income in the form of wages from a job usually have to show between one and three months worth of pay stubs. In addition, lenders require the most recent tax returns and W-2 forms. Lenders also require bank statements from the previous one to 12 months. Self-employed borrowers have to show financial documentations such as profit and loss sheets, records of expenses and debts, and up to 24 months worth of business bank statements. Your income needs to be high enough to cover the cost of the house plus taxes, insurance and interest on the loan.
  
  

Debt to Income Ratio

• Lender will also look at your debt-to-income (DTI) ratio to see if you qualify for a mortgage. The DTI ratio adds all of your current debt to the debt of a new mortgage. Lenders then divide this number by your total income and multiple to result by 100 to get the ratio. Lenders usually want to see a DTI ratio under 33 percent.
  
  

Credit Score

• Paying previous debts on time is another financial requirement to qualify for a mortgage. Lenders want to be sure you are a good credit risk and will pull your credit report from one or more credit reporting bureaus. Lenders will look at your history of paying debt as well as look for any credit red flags such as judgments, bankruptcies and charge-offs. People with marginal or fair credit may still be able to qualify for a mortgage with a higher interest rate. However, people with poor credit will usually not qualify for a mortgage. Borrowers with thin or new credit histories may be able to use statements and canceled checks from utility payments or credit accounts that do not appear on a credit report.
  
  

Down Payment

• Lenders often require a down payment to approve a mortgage. Down payments reduce the loan-to-value ratio which puts less risk on the lender if the home drops in value or the borrower defaults. The traditional down payment amount is 20 percent of the value of the home. However, many lenders will accept a lower down payment in exchange for the borrower buying private mortgage insurance, which helps the lender recoup losses if the borrower defaults on the mortgage before the loan balance equals 80 percent or less of the home's value.