Lenders consider two main points when reviewing loan applications: the likelihood of repaying the loan (typically determined by a credit score) and the ability to do so (typically determined by proof of income).

Nerdwallet.com explains that mortgage income verification, even if they have impeccable credit, borrowers still must prove their income is enough to cover monthly mortgage paymen

Online resource Investopiea.com explains that the lower an applicant’s debt-to-income ratio, the greater the chances that the borrower will be approved for a credit application.

As a customary rule, 43 percent is the highest debt-to-income — read DTI — ratio a borrower can have and still be qualified for a mortgage.

However, lenders prefer a debt-to-income ratio lower than 36 percent, with no more than 28 percent of that debt as a mortgage or rent payment.

In reality, though, the maximum DTI ratio varies from lender to lender.

Mortgage refinancing options are reserved for qualified borrowers, just like new mortgages. As an existing homeowner, you’ll need to prove your steady income, have good credit, and be able to prove at least 20 percent equity in your home.

Just like borrowers must prove creditworthiness to initially qualify for a mortgage loan approval, borrowers have to do the same for mortgage refinancing.

Both ratios are considered for credit application approvals.

Front-end DTI s a calculation beyond DTI that pinpoints how much of a person’s gross income is going toward housing costs. If a homeowner has a mortgage, the front-end DTI is typically calculated as housing expenses, including mortgage payments, mortgage insurance, and homeowners insurance, divided by gross income.

On the other hand, back-end DTI estimates the percentage of gross income going toward other types of debt, such as credit cards or car loans.

Experian explains that prequalification tends to refer to less rigorous assessments, while a preapproval will require you to reveal more personal and financial information with a creditor.

As a result, an offer based on a prequalification may be less reliable than an offer based on a preapproval.

There are four key factors to qualifying for a home mortgage: a down payment of at least 3 percent, a credit score of at least 620, PMI rates or similar fees, and DTI

For an FHA loan, the residence must be the primary place you will live. In addition, you need to have a credit score of at least 500, a down payment of at least 3.5 percent, and a DTI ratio of less than 50 percent. No specific income minimums are required. Watch our video for more information. (This is an estimated example.)

To afford a house that costs $600,000 with a 20 percent down payment (equal to $120,000), you will need to earn just under $90,000 per year before tax. The monthly mortgage payment would be approximately $2,089 in this scenario. (This is an estimated example.)

To afford a $400,000 house, borrowers need $55,600 in cash to put 10 percent down. With a 30-year mortgage, your monthly income should be at least $8200 and your monthly payments on existing debt should not exceed $981. (This is an estimated example.)

To be approved for a $200,000 mortgage with a minimum down payment of 3.5 percent, you will need an approximate income of $62,000 annually. (This is an estimated example.)

The maximum mortgage you may qualify for depends on several factors, including: credit score, combined gross annual income, monthly expenses, the proposed down payment, and other associated costs.