Definition
Lender requirements are minimum standards for loan approval including credit, DTI, reserves, and documentation. Investment properties have stricter requirements.
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Typical requirements include 680+ credit score, <43% DTI, 2-6 months cash reserves. Investment property requirements are stricter than primary residence. Understanding requirements helps qualify for loans.
Pro Tip
Understand lender requirements before applying. Prepare financials meeting requirements.
Example
Lender requires 720+ credit, <40% DTI, 6 months reserves for investment property; borrower qualifies with 750 credit, 38% DTI, 12 months reserves