The lender needs to see signs of stability. Don't make any sudden changes in your employment if you're planning to apply for a mortgage soon-stay at your job for well over two years.
Low Credit Card Debt
Your back-end debt-to-income ratio plays an important part in getting approved for a home loan. This ratio is the total amount of debt payments you make each month divided by your gross monthly income. It should ideally be under 36 percent, but to increase your chances of getting approved for a home loan, work on getting that percentage below 30 percent.
A charge-off is the worst thing to have on your credit report because it means all the creditors attempts to come to an agreement regarding the debt has been ignored. Call all outstanding creditors and collectors in advance to come to a compromise regarding the debt as soon as possible-don't wait until a potential mortgage lender is pulling your credit report to find the negative items.
A Home Within Your Budget
Along the same lines with minimizing your debt-to-income ratio, you should also minimize your potential monthly housing expense as a percentage of income (the front-end ratio). Your front-end ratio shouldn't exceed 28 percent, so to improve your chances of getting approved, choose a home that puts you closer to 20 to 22 percent.
Money Saved Up
Loans with little money down are more difficult to get. Increase your chances of getting approved by saving up for at least 10 to 20 percent down.