The first lesson I was taught, when I first dove into the world of mortgage, was that of the Golden Mortgage Triangle. A cheesy name sure, but an effective lesson, nonetheless. The Golden Triangle refers to the 3 criteria a lender will look at when determining whether or not to give you a loan. So even if you are not planning on becoming a loan officer anytime soon, the lesson is still applicable. 

The Three Points of the Triangle:

Loan To Value: Arguable to most, an important facet when determining whether or not to lend to someone is how much the house is worth in relation to what is being lent. This is referred to in the industry as Loan to Value or LTV 

Debt to Income Ratio (DTI):  This is the borrower's income in relation to what they will be paying a month in bills. It gives the bank an idea of whether or not monthly mortgage payments will be easy or difficult.

Credit Score: This is a numerical score based on someone's credit history. While credit score is extremely important, its importance in lending has declined in recent years, as many high FICO borrowers defaulted when the market dove. 

Bankapedia's Take: 

While the Golden triangle captures 90% of what a lender will use in determining credit worthiness, there are a few things outside of it that will be considered. Among them:

• Type of property being financed (condo, single family residence, duplex etc.) 
• Will the home be your primary residence? A home being financed as an investment property or a vacation home will typically require more money down as a result of higher default rates for these types of properties. 
• How long have you been at your job? If you have been working at a new job for only a few months, or have only been in the same line of work for less than 2 yrs, the banks are either not going to finance you or make it a little more challenging to finance your home. 
• Where you live. A home in a declining market (e.g. Vegas, Miami, Phoenix) during the housing bust is going to be a greater challenge to finance as a result of the declining collateral.