What Lenders Look For in Buyers

When you apply for a home loan, lenders aren’t just checking if you want a house—they’re evaluating how likely you are to pay them back consistently.

1. Credit Score

Your credit score tells lenders how you handle debt.

• High score (700+) → Better approval chances, lower interest rates

• Low score (<620) → Harder approval, higher rates

👉 Tip: Pay bills on time and reduce credit card balances before applying.

2. Income Stability

Lenders want to see reliable and consistent income.

• At least 2 years of steady work history

• Can include salary, freelance, or business income (with proof)

👉 If your income varies (like VA work or business), expect stricter review.

3. Debt-to-Income Ratio (DTI)

This shows how much of your income goes to debt.

• Ideal: Below 36%

• The lower, the better

👉 Example:If you earn ₱100,000/month and pay ₱30,000 in debts → DTI = 30%

4. Down Payment

The more you put down, the less risky you are.

• Typical: 10–20%

• Lower down payments are possible but may cost more monthly

5. Savings & Reserves

Lenders check if you have backup funds.

• Emergency savings = 3–6 months of expenses

• Shows you can still pay even if income is disrupted

6. Employment & Background Check

They verify:

• Job stability

• Employer details

• Sometimes industry risk

7. Property Itself

The house also matters.

• Must be properly valued (appraisal)

• Must meet lending standards

👉 Lenders won’t approve a loan for an overpriced or risky property.

Reality Check

Lenders are focused on risk, not your comfort.You might get approved for more than you should actually spend.