Getting mortgage-ready

Lenders use your MIDDLE score, not your best

A mortgage lender pulls all three bureaus and takes the middle of the three scores. Not the highest, not an average — the middle.

Someone with 720, 690 and 688 is underwritten at 690. This is why a single bureau carrying an error matters so much for a mortgage: if the error sits on the file that would otherwise have been your middle score, it sets your rate.

Buying with someone else? Most lenders use the LOWER of the two applicants’ middle scores. The stronger file does not carry the weaker one.

The score ranges lenders work to

Programme minimums are published, and they set the floor rather than the outcome:

• Conventional loans generally start at 620, with better pricing tiers from roughly 680 and again from 740
• FHA loans are typically available from 580 with 3.5% down, and from 500 with 10% down
• VA and USDA loans have no statutory minimum, but most lenders apply their own, often around 620

Debt-to-income is where most approvals are decided

DTI is your total monthly debt payments divided by your gross monthly income. Lenders look at two figures:

• Front-end — the proposed housing payment alone, often expected around 28–31%
• Back-end — housing plus every other monthly obligation: car loans, student loans, minimum card payments, child support. Commonly capped around 43–45%, higher on some programmes with compensating factors

What counts in the housing payment

It is not just principal and interest. Underwriters use PITI, plus anything else attached to the property:

• Principal and interest
• Property taxes
• Homeowner’s insurance
• Mortgage insurance, where the down payment is under 20% on a conventional loan, or on most FHA loans
• HOA dues, where they apply

Cash: down payment is not the whole number

Closing costs typically run 2–5% of the purchase price and are paid on top of the deposit. Many programmes also expect reserves — enough left afterwards to cover a number of monthly payments.

Money that arrives shortly before the application gets scrutinised. Lenders look for seasoned funds, usually meaning two or three months in the account. A large unexplained deposit will be questioned, and a gift generally needs a signed letter confirming it is not a loan.

The mistakes that cost people approval

These are the ones that most often surprise buyers, because each feels sensible at the time:

• Opening a new credit account during the process — it adds an inquiry, lowers average account age, and adds a payment to your DTI
• Financing furniture or a car before closing — the new payment can push DTI past the limit days before completion
• Closing an old card — it removes that limit and raises utilization
• Changing jobs, or moving from salaried to self-employed, mid-application
• Moving large sums between accounts, which makes the paper trail harder to verify
• Missing any payment at all during underwriting

Lenders commonly re-pull credit shortly before closing. A change made after approval can still undo it.

Rate shopping does not punish you

Mortgage inquiries made within a short window are treated as a single event by scoring models — typically 14 to 45 days depending on the model. Comparing several lenders in a fortnight is one inquiry, not five.

This is a deliberate feature of the scoring models, designed so that shopping for the best rate is not penalised.

A sensible timeline

Starting twelve months out gives room to act on what you find. Six is workable; six weeks is not.

• 12 months out — pull all three reports, dispute anything inaccurate, and stop opening new accounts
• 6 months out — bring utilization down and keep every payment on time
• 3 months out — leave your cash where it is so it seasons; do not move large balances
• 1 month out — change nothing at all

If a report has an error on it

An inaccurate late payment or a duplicate collection can be the difference between pricing tiers, and on a thirty-year loan a tier is a large amount of money. You have the right to dispute anything inaccurate, incomplete or unverifiable under the Fair Credit Reporting Act.

Do it early. Bureaus generally have 30 days to investigate, extending to 45, and no result is guaranteed — which is exactly why it is not a thing to start a fortnight before an offer.

How Storehouse fits

Storehouse shows all three VantageScore 3.0 scores separately, so you can see which file would be your middle score and whether the three disagree. Where an item looks inaccurate you can prepare a dispute and approve it as your own.

The home affordability estimates are estimates — built from your credit, verified balances and stated income against published programme rules. They are not a pre-approval, an offer of credit, or a promise of any rate.