How to get a mortgage

Unless you plan on paying in cash, you’ll need a mortgage to buy a home. Not surprisingly, over 61% of owner-occupied US homes are covered by a mortgage, according to the US Census Bureau.¹ But how, exactly, do you get a home loan? And what are the steps to take before applying for a mortgage? Consider this your checklist for getting started.

How to get a mortgage

1. Check your credit score

Lenders consider your credit score when determining whether to approve you for a mortgage, how much to lend you, and at what interest rate. What credit score is needed to buy a house? It depends on the loan type, but generally lenders want a score of at least 620, though some government loans have lower requirements.

If you’re unhappy with your credit score, you could take steps to improve your credit score before you apply for a mortgage.

• Reduce your debt. Using less of the total credit available to you can help your credit score.
• Pay your bills on time. How timely you are with payments is a large factor in your score.
• Dispute any errors on your credit report. Correcting score-dropping mistakes, such as a record of delinquencies when you actually paid on time, could increase your score.
• Avoid applying for new credit. Signing up for new loans or credit cards can trigger a hard inquiry into your credit, which temporarily lowers your score.
• Don’t close old accounts. Having a longer average age of all of your credit accounts can positively impact your score. Closing an old credit card can bring down that average age.

Here’s what else to do to get financially ready to buy a house.

2. Decide what kind of mortgage you want

There are several different types of mortgages. The most common include:

• Conventional loans: These mortgages are available from financial institutions and aren’t insured by a government agency. They tend to have stricter requirements than government-backed mortgages.
• Government-backed loans: Mortgages are available through the Federal Housing Administration (FHA), the Department of Veterans Affairs (VA), and the Department of Agriculture (USDA). These mortgages are backed by the federal government and generally have looser requirements for a qualifying credit score and down payment amount. In fact, FHA loans only require a credit score of 500 with 10% down. Still, there may be other eligibility requirements to meet, like needing to have served in the military or being married to someone who did.
• Jumbo loans: These may require a higher credit score and down payment, but they could increase your borrowing power if you have your eye on a high-priced home. The minimum amount for a jumbo loan varies by region and year, but in many areas in the US in 2025, it’s any single-family home mortgage above $806,500. In Hawaii, Alaska, and some higher cost-of-living areas, that number is anything above $1,209,750.

Think about loan term too. There’s a standard 30-year term or a shorter 10- or 15-year term. A 30-year mortgage typically translates to lower monthly payments, but greater overall interest payments. A shorter term, on the other hand, usually means having a larger monthly payment—but you’ll pay less interest over the life of the loan.

3. Save your down payment

Lenders want to see you have enough upfront money for the house you want. A common guideline is to put down at least 20% of the home’s price because it could help you avoid paying extra for PMI—private mortgage insurance. A larger down payment also means you’ll have a smaller overall mortgage and lower monthly payments.

However, a 20% down payment may not be feasible. Eligible borrowers could get approved for an FHA loan with as little as 3.5% percent down—or 0% with a VA or USDA loan. It’s also possible to get approved for a conventional loan with just 3% down, but consider shooting for more, because the smaller your down payment, the higher your monthly payment, often with mortgage insurance added on. According to the National Association of Realtors, 9% is the median first-time homebuyer down payment. Learn more about how to save for a house down payment.

4. Know your debt-to-income (DTI) ratio

Mortgage lenders want to be sure you’ll be able to afford your monthly payments. That’s where your back-end debt-to-income (DTI) ratio comes in. This metric looks at your monthly debt obligations and housing costs.

To calculate your back-end DTI, add together all your monthly debt payments—like for credit cards and student loans—and housing costs, including your estimated mortgage payments and homeowners insurance premiums. Divide that number by your gross monthly income (before taxes and other deductions) to get a percentage. Generally speaking, the lower your DTI, the better. Many lenders prefer a back-end DTI of 36% or lower, though some will go as high as 45%.

5. Research mortgage lenders

There are many options out there, and it’s worth it to spend time picking a mortgage lender. Consider reaching out to lenders that offer the following:

• The type of mortgage you’re interested in: Not all lenders offer all types of mortgages. Some may offer multiple loan types, while others may specialize in a specific type of loan. A lender that works primarily with service members and their families, for example, may be well-suited to help you qualify for a VA loan.
• Low rates: Shaving even a fraction of a percent off your interest rate could save you thousands of dollars over your mortgage’s term.
• Features that matter to you: Do you want a mortgage lender with positive reviews and a reputation for delivering strong customer service? One who makes recasting or refinancing low-cost and easy? Account for these when you decide where to apply for a mortgage.

6. Get preapproved

This is when a lender determines if you’re likely to be approved for a loan. A preapproval can also reveal your expected loan amount and interest rate. While preapproval can look different from lender to lender, it usually requires a hard credit check and the following:

• An application: Including your estimated down payment amount and desired mortgage amount
• Government-issued ID: Such as a driver’s license or passport
• Income verification: Paystubs, W-2s, proof of child support or alimony, and the like
• Employment information: Employer name and contact information, plus dates of employment
• Asset verification: Statements for your bank, investment, and retirement accounts

If the lender preapproves you, they should send you a preapproval letter that outlines the details of the loan they’re prepared to offer you, assuming your mortgage application is approved. This letter is typically valid for 30 to 90 days. Many sellers require a preapproval letter before accepting an offer, as it proves you’re serious about the purchase and have the financial means to close the deal.

7. Make an offer on a home

Once you’re preapproved for a mortgage, you can begin searching for homes in earnest. Consider working with a local real estate agent. They should be familiar with properties in your area and could help you find listings that fit your budget and criteria—plus, they could make formal offers on homes on your behalf. When they do, the seller may request to see a copy of your mortgage preapproval letter.

8. Complete your mortgage application

Offer accepted? Congrats! Even if you’ve been preapproved for a mortgage, you’d still need to submit an official mortgage application once you’re ready to buy. If you submitted financial statements with your preapproval application, you may need to provide updated copies, along with additional information your lender requires.

9. Get an appraisal and consider getting a home inspection

Many lenders require home appraisals to make sure the amount they’re loaning you matches the property’s actual worth. As part of this underwriting process, the lender typically selects the appraiser but charges you for the service. Scheduling a home inspection to make sure there are no serious defects tends to be entirely on you, though your real estate agent likely could suggest a vendor. The lender uses the information gathered from the appraisal, along with your credit report and application, to decide whether or not to grant you a mortgage.

10. Get ready to close

You’re in the home stretch now. If you get approved for a mortgage, the next steps often include the following:

• Conducting a final walk-through of the home you’re buying
• Reviewing your closing disclosure and loan estimate, which contain the final mortgage details

You should also prepare to pay closing costs, which will be due at the closing meeting. These often include a variety of lender fees and payments to third-party service providers, like a title insurance company. Also expect to prepay a portion of your homeowners insurance premiums and property taxes, which will likely be held in an escrow account. Closing costs generally range anywhere from 2% to 5% of the loan amount, according to the National Association of Realtors. Check with your lender, real estate agent, or attorney about the types of payment accepted for these fees. For instance, you may need certified or cashier’s checks rather than personal checks.

11. Close on your home

During your closing meeting, you’ll sign your mortgage agreement and other documents that make the transaction official.

While it can vary, a closing could involve your real estate agent, title insurance company, escrow company, attorney (if applicable), the seller’s attorney, and a notary. Your lender may or may not attend. This meeting typically takes place in person, but it may be possible to attend the closing meeting virtually. After everything’s signed, it’s official. You have a mortgage—and own a home.