Key Takeaways
- You don’t need perfect credit or a huge down payment – many loan programs are flexible for first-time buyers.
- Lenders look for steady income, manageable debt and documentation before approving a mortgage.
- Preapproval, inspections and appraisals help you shop confidently and protect your investment.
Unless you can pay cash, you’ll need a mortgage loan to finance your dream home. That means meeting the basic requirements to buy a house, including a credit score, a steady income, a solid employment history, and sufficient savings for a down payment and closing costs.
The exact rules vary by loan type, but the minimum qualifications to buy a house are often more flexible than most first-time home buyers expect. Lenders may be willing to work with you on credit and down payment, so the path to homeownership could be closer than you think.
Here’s what you need to buy a house.
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- Credit score
- Income and employment
- Down payment and closing costs
- Debt-to-income ratio
- Required documents
- Mortgage preapproval
- Real estate agent
- Home inspection
- Home appraisal
Key requirements to buy a house
- Good credit score – minimums vary by loan type (580–640+).
- Stable income & employment – typically 2+ years of work history.
- Down payment & closing costs – at least 3% down, plus 2–5% for closing.
- Manageable debt-to-income ratio – usually under 36–43%.
- Financial documents – pay stubs, tax returns, bank statements, ID.
- Mortgage preapproval – shows sellers you’re a serious buyer.
- Real estate agent – guides you through searching and negotiations.
- Home inspection – ensures the property is safe and sound.
- Home appraisal – confirms the home’s value matches the loan.
9 essential requirements to buy a house
Unless you’re buying with cash, you’ll need a mortgage loan to finance your new home purchase. For first-time home buyers, this means meeting a few basic minimum requirements for buying a house, including things like credit, income, savings, and documentation.
Below, we’ll break down the seven key requirements to purchase a home before you start house hunting.
1. A good credit score
You don’t need perfect credit to buy a home. Different loan programs have their own credit score requirements, and some allow qualification with a score as low as 580. Keep in mind that lower credit scores often result in higher interest rates.
Verify your first-time home buyer eligibility. Start hereHere are the minimum credit score requirements to buy a house:
- Conventional loan: 620
- FHA loan: 580 (some lenders go as low as 500 with 10% down)
- USDA loan: 640
- VA loan: 580–620, depending on the lender
Meeting the minimum credit score requirement doesn’t guarantee you’ll qualify for a mortgage. Lenders also review your credit report, with special attention to your most recent history.
What if I have no credit history?
Qualifying for a mortgage without a traditional credit history is possible. Programs like FHA, VA, and USDA may count non-traditional credit, such as rent, utility, insurance, or cell phone payments, to show you can handle debt.
Some conventional lenders may also accept a 12-month history of rent and utility payments as proof of financial stability. However, this option often comes with higher mortgage rates.
2. Stable income and employment
Lenders need to confirm that your monthly income is sufficient to support a monthly mortgage payment. Most want 24 months of consecutive employment before approving a home loan.
Check your home buying eligibility. Start hereThis income requirement also applies to self-employed borrowers. You’ll provide business and personal tax returns for the past two years, and lenders usually average your income over that period to qualify you.
There’s no minimum income requirement to buy a house, but you can earn too much money for some first-time home buyer programs. For example, USDA loans cap household income at 115% of the area median. And Fannie Mae‘s HomeReady and Freddie Mac‘s Home Possible programs also set income limits.
The key is showing steady or growing income. Whether salaried, hourly, or self-employed, lenders use these figures to decide if you meet the criteria for buying a house and are ready for getting a home loan.
3. Savings for a down payment and closing costs
Most home buyers are required to make at least a small down payment on their mortgage. However, lenders also verify that you can cover the closing costs.
Minimum down payment requirements are:
- Conventional loan: 3%
- FHA loan: 3.5%
- VA loan: Zero down
- USDA loan: Zero down
Although a conventional loan doesn’t require 20% down, putting less means you’ll pay private mortgage insurance premiums (PMI) until you build enough equity.
Buyers also typically make an earnest money deposit when submitting an offer. That money is held in escrow and applied to the down payment on the closing date of the loan.
Closing costs
Closing costs cover lender fees and services, such as title insurance, title searches, and home appraisals. Closing costs are typically about 2%–5% of the loan amount. A 3% down payment often results in a total cash requirement of 5%–8% of the home’s value to close the transaction.
Sellers may agree to cover part of your closing costs, and some lenders offer credits in exchange for a higher interest rate. If saving still feels challenging, you can also explore down payment assistance programs, which provide grants or loans to help with your down payment or closing costs.
4. Budget and debt-to-income ratio
Your existing debts help determine how much you can borrow. High monthly debt from credit cards, student loans, or other installment loans can make qualifying for a mortgage more challenging.
Having a lower debt-to-income ratio (DTI) can increase your likelihood of approval and enable you to qualify for more favorable loan terms, such as lower interest rates.
Check your home buying eligibility. Start hereLenders look at your DTI ratio, which shows the percentage of your gross monthly income spent on debt. The DTI also includes property taxes and homeowners’ insurance, so your budget should account for these costs
Maximum DTI limits vary by loan type:
- Conventional loan: 36%–43%
- FHA loan: 43%
- USDA loan: 41%
- VA loan: 41%
Some lenders allow higher DTI ratios with strong “compensating factors,” such as a large down payment, a high credit score, or additional savings.
First-Time Home Buyer Tip
A mortgage calculator can help estimate your true affordability and show whether you meet the requirements to buy a home.
5. Financial documentation
Lenders also check your paperwork as part of the mortgage application. You’ll typically need:
Check your mortgage eligibility. Start here- Recent pay stubs
- Tax returns and W-2s or 1099s for the previous two years
- Employment verification letter
- Bank statements and information about other assets
- Photo ID
- Rental history
- Year-to-date profit and loss statement, if you’re self-employed
Additional documents may be required depending on your situation. For example, if you’re using gift funds for your down payment or closing costs, lenders require a signed gift letter. If alimony or child support counts toward income, you’ll provide court orders as proof.
6. Get mortgage preapproval
While not technically a requirement to purchase a home, a mortgage preapproval demonstrates to sellers that you’re a serious buyer and tells them how much you can afford. Unlike prequalification, which is only an estimate, preapproval requires a complete mortgage application and a review of your credit, income, and assets.
Get started on your mortgage preapproval. Start hereMost lenders issue a preapproval letter that’s valid for about 90 days. This letter provides a clear price range for house hunting and strengthens your offer when you find a suitable home. If the letter expires, you can refresh it with updated documents.
7. Work with a real estate agent
Hiring a real estate agent isn’t a home loan requirement, but it’s highly recommended. An experienced agent can help you find homes, negotiate with sellers, and navigate contracts. They serve as your advocate throughout the process, and most buyers find their expertise valuable.
Be cautious with dual agency, where one agent represents both the buyer and the seller, as this arrangement may not be in your best interest.
8. Get a home inspection
A home inspection is usually not required by lenders, but it’s highly advised. An inspection provides a clearer understanding of the property’s condition and can uncover issues before you commit to buying.
Conventional loans leave this decision up to you. Still, the Federal Housing Administration (FHA) requires homes to meet minimum property standards, and the Department of Veterans Affairs (VA) requires service members using VA loans to buy homes that comply with similar safety and livability checks.
9. Get a home appraisal
Unlike an inspection, lenders almost always require a home appraisal. The appraisal verifies that the property is worth the loan amount, protecting the lender from over-lending. The only exceptions are cash purchases or rare appraisal waivers, which may be available in some refinance cases.
FAQs about the requirements to buy a house
Time to make a move? Let us find the right mortgage for youTo buy a house, you’ll need a qualifying credit score and debt-to-income ratio, proof of income and employment, and enough cash to cover the down payment and closing costs. Specific qualifying requirements will vary depending on your loan program and mortgage lender.
It typically takes about 30 to 60 days to buy a house once you’re under contract. However, shopping for your new home and getting an offer accepted can take months. The amount of time it takes you to buy a house will depend on how long you look for a home, plus the time spent closing on the mortgage loan.
You can buy a house without a mortgage. However, you’ll need sufficient funds to cover the entire purchase price upfront. Other options for buying a house without a mortgage include seller financing, rent-to-own programs, and private loans. But these types of alternative financing are often riskier and come with higher interest rates than standard mortgage loans.
To buy a house, you’ll need enough money to cover the down payment and closing costs. These add up to at least 5 to 8 percent of the home’s purchase price. For example, if you’re purchasing a $300,000 home, plan on budgeting a minimum of $15,000 to $24,000. However, you may need as much as 22 to 25 percent if you want to avoid private mortgage insurance on a conventional loan.
Yes, you can buy a house with bad credit if you meet other mortgage requirements and complete the whole mortgage application process. FHA loans often accept credit scores as low as 580, and some lenders may go as low as 500 with a larger down payment. VA and USDA loans also allow lower credit scores, though underwriting standards and loan terms may vary by lender. Even with approval, expect to pay a higher interest rate if you have a poor credit history.
You can qualify for a mortgage after bankruptcy, but lenders closely examine your financial situation and ability to manage debt. Most programs require a waiting period that varies depending on the loan type. For instance, conventional loans often demand a four-year wait after a Chapter 7 discharge, while FHA and VA loans may permit approval after just two years. Chapter 13 cases can be shorter, sometimes only one year, provided there is proof of timely payments. After foreclosure, the waiting period usually ranges from two to seven years, depending on the circumstances. Meeting these timelines, rebuilding your credit, and maintaining low debt levels increase your chances of getting a home loan.
Are you ready to buy a house?
Meeting the requirements to buy a house is the first milestone for first-time home buyers. Once you’ve checked your credit, income, savings, and documents, the next step is exploring your loan options.
Comparing offers from multiple lenders can reveal what you qualify for, what your monthly mortgage payments could be, and how different programs fit your budget.
Click the links below to compare offers without any obligation. It’s an easy way to take the next step toward confidently buying your first home.
