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How to Get a Mortgage

A mortgage is a loan to purchase property or real estate. When you take out a mortgage, you borrow money from a lender—often a bank or financial institution—to buy a home. The lender holds the property as collateral until you pay it in full.

Figuring out how to get a mortgage can be a long and complex process, but it doesn’t have to be daunting. It can be an exciting step toward owning your dream home. 

Whether you’re a first-time homebuyer or looking to refinance, read more to find out how to apply for a mortgage and the next steps.

In this guide:

What to do before you get a mortgage

Before you apply for a mortgage, you should take the following steps to prepare and increase your approval chances. 

  1. Save for a down payment: Most lenders require a down payment of 3% to 20% of the home’s purchase price. Consider saving up money before you apply for a mortgage.
  2. Check your credit: Your credit score determines your interest rate and approval odds. Check your credit report before applying to identify errors and take steps to improve your score if necessary. Your FICO score should be 620 or higher for solid rates and approval odds.
  3. Get your finances in order: Lenders want to see a stable income and a low debt-to-income (DTI) ratio. Ensure you have a steady job and pay down any outstanding debts. You’ll have the highest chances of success with a DTI under 43%.
  4. Determine how much house you can afford: Use a mortgage calculator to get an idea of how much you can afford to borrow based on your income, expenses, and down payment.
  5. Shop around for lenders: Don’t just go with the first lender you find. Shop around and compare several lenders’ rates to find the best mortgage for your needs. A mortgage broker may be helpful in this step. A broker is an individual or company that matches potential borrowers with potential lenders but does not lend their own money.

When to apply for a mortgage

You don’t need to select a home before you apply for a mortgage. Some lenders offer preapproval, which tells you how much you can borrow based on your financial situation.

Lenders use the following factors to determine whether to approve you for a mortgage:

  • Credit score
  • Income
  • Debt-to-income ratio
  • Employment history

Get an idea of your likelihood of approval by checking your credit score and consulting with a lender or mortgage broker.

If you’re not yet preapproved, you can use a mortgage calculator to estimate how much house you can afford based on your income, expenses, and down payment. This can help determine your price range. 

While shopping for a home, don’t take on any new debt or make any major financial decisions that could lower your credit score. A preapproval is often good for 60 to 90 days. If you don’t find a house to buy within that time frame, you may have to restart the preapproval process.

What’s needed to be approved for a mortgage?

In general, borrowers should meet these requirements to get approved for a mortgage:

  • Good credit score: You often need a minimum score of 620 for conventional loans, 580 for FHA loans, and 640 for USDA loans
  • Steady income and employment history: Borrowers must have a steady income and employment history to demonstrate their ability to repay a mortgage. 
  • Low debt-to-income ratio: Lenders will review your debt-to-income ratio to determine whether you can afford your monthly mortgage payments. A DTI above 43% can result in rejection of the application or a higher interest rate.
  • Appraisal: The property being purchased must be appraised to determine its value and ensure it meets the lender’s standards. 
  • Title search and title insurance: Lenders will perform a title search to ensure there are no liens or outstanding claims on the property. The lender may also require title insurance to protect against any future claims.

If something goes wrong with any of these steps, it can affect your ability to get approved for a mortgage. 

But lenders may still work with you if one part of your application is strong, such as having a large down payment or low DTI. Likewise, you may qualify for approval with a cosigner.

How to apply for a mortgage

The application process involves various parties, including the borrower, lender, real estate agent, and title company. The length of the application process can vary but often takes between 30 and 45 days. 

The steps to apply for a mortgage often look like this:

  1. Get preapproved: Before applying, consider getting preapproved by a lender. This helps you determine how much you can afford to borrow, makes you more attractive to sellers, and can speed up the application process.
  2. Gather your documents: Once you’re ready to apply for a mortgage, gather your proof of income, employment history, tax returns, bank statements, and any other documents your lender requests.
  3. Submit your application: You can submit your mortgage application online or in person, along with your required documents.
  4. Wait for underwriting: Your lender will review your application and documents during the underwriting process and decide whether you’re approved for the mortgage. The lender may also request additional documentation or information during this time.
  5. Close on your new home: If your mortgage is approved, you will attend a closing, where you’ll sign the final paperwork and get the keys to your new home.

Finding the best mortgage lender often involves shopping around and getting quotes from several companies. It also involves comparing each company’s interest rates, fees, customer service, and reputation. A mortgage broker may be able to assist in this process.

Differences between prequalification and preapproval

Getting prequalified is easier than getting preapproved, but it’s also less official. This table can help you decide whether mortgage prequalification or preapproval is right for you.

Soft credit checkHard credit check
Based on preliminary information the borrower providesBased on a deeper dive into the borrower’s finances
Estimates how much the borrower might be able to borrowGives a specific amount the borrower is approved to borrow
Does not guarantee approval for a mortgageIndicates the borrower will likely be approved for a mortgage
Often takes less time than preapprovalOften takes longer than prequalification

What happens when you’re approved for a mortgage?

Once you’re approved for a mortgage, the lender will send a loan commitment letter that outlines the terms of the loan. This letter serves as proof you’ve met all the lender’s requirements and are approved.

With the letter, you can move forward with the closing process, which involves signing all the final paperwork and transferring property ownership. The closing process often takes place at a title company or attorney’s office and involves the borrower, seller, and any relevant parties, such as real estate agents.

At closing, you’ll sign any documents required to secure your loan against the property. You’ll also pay closing costs, which could include appraisal fees, title insurance, and other charges. After closing, you’ll begin making regular mortgage payments to your lender.

What if you’re denied?

If a lender denies your mortgage application, you can take several steps:

  • Review the reason for the denial: The lender must provide a reason for your denial. Review this information to understand why you were denied. You can also request a copy of your credit report to ensure all information is accurate.
  • Work on improving credit or financial situation: If the reason for the denial is related to your credit or financial situation, work on improving these areas before applying again. This could include paying off debt, improving your credit score, or increasing income.
  • Apply with another lender: You can apply with another lender on the same property, but multiple credit inquiries can harm your credit score. It’s best to wait until you’ve taken steps to improve your financial situation before applying again.
  • Apply for a mortgage on a different property: If you’re still interested in purchasing a property, consider applying for a mortgage on a cheaper property with the same or a different lender.
  • Get a cosigner: If you’re denied a mortgage, consider getting a cosigner with good credit to help you qualify for the loan. A cosigner is someone who accepts legal responsibility to repay the loan if you are unable to.


Does my down payment affect my chances of approval?

Yes, the size of your down payment can affect your chances of approval. A larger down payment can make you more attractive to lenders because it shows you’re responsible and have more invested in the property. 

However, low-down-payment mortgages are available.

Does my down payment affect the terms of my mortgage?

Yes, your down payment can affect the terms of your mortgage. A larger down payment will lower your monthly payments and the overall cost of your mortgage. It can also help you lock in a better interest rate.

How does applying for a mortgage affect my credit score?

A mortgage application requires a hard inquiry, which can reduce your credit score. However, if you apply for multiple mortgages in a short time, often 14 to 45 days, credit agencies count it as a single inquiry. This “rate shopping” window helps you compare offers without hurting your credit score.

How to get a mortgage when you’re self-employed

Getting a mortgage when you’re self-employed can be more complicated than if you were a traditional borrower. It often requires additional documentation to prove your income and financial stability, such as tax returns and bank statements. 

Can you get a mortgage on a second home?

Yes, it is possible to get a mortgage on a second home. However, the requirements and terms often differ from those for a primary residence. 

What types of property can you get a mortgage on?

You can get a mortgage on various property types, including single-family homes, condominiums, townhouses, multi-unit properties, and vacation homes.