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How to Get a Mortgage in 2023: Step-by-Step Guide

Follow these steps to secure a mortgage loan when purchasing a home.

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By Kevin Payne

Written by

Kevin Payne

Writer

Kevin Payne is a finance and family travel expert. He writes about credit cards, travel, student loans, saving money, homeownership, careers, and entrepreneurship. His work has appeared in Forbes Advisor, The Ascent, FinanceBuzz, Slickdeals, Student Loan Planner, and more. He is working toward accreditation as an Accredited Financial Counselor (AFC).

Edited by Reina Marszalek

Written by

Reina Marszalek

Senior editor

Reina is a senior mortgage editor at Credible and Fox Money.

Updated November 20, 2023

Editorial disclosure: Our goal is to give you the tools and confidence you need to improve your finances.

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Buying a home is often one of the most significant financial decisions you'll make in your lifetime. For many potential homebuyers, getting a mortgage is a vital part of the process. Having a mortgage allows you to finance the home purchase over time instead of paying cash upfront. Follow this guide to understand how to apply for and secure a mortgage.

What to do before you apply for a mortgage

Take some time before you apply for a mortgage to assess your credit. There are some steps that can improve your credit and your odds of getting approved:

  • Review your credit report: Use AnnualCreditReport.com to access your credit reports from the three major credit bureaus for free. Ensure the information is up to date and there are no errors or missing information that may hurt your credit. If you find errors, file a dispute through the credit bureau.
  • Check your credit score: While reviewing your credit, take time to double-check your credit score. Banks and lenders often have minimum credit score requirements you must meet to be eligible for a mortgage.
  • Pay down debt: One of the best ways to improve your credit score is to pay down existing revolving debt, like credit card balances. Paying down debt balances improves your credit utilization ratio, or the amount of available credit you use.
  • Pay your bills on time: Lenders consider your payment history when approving mortgage loans. Paying your bills on time each month helps you build a positive payment history, one of the major factors used to calculate credit scores.
  • Skip opening new credit accounts: Avoid applying for or opening other lines of credit in the months leading up to applying for a mortgage. Multiple credit applications in a short period can be a red flag to some lenders and can lower your credit score.

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How to get a mortgage

Securing a mortgage is a relatively straightforward process but can take some time to complete. Follow the steps below to get a mortgage.

Choose a mortgage loan

Before you get a mortgage, you must first decide which type of mortgage to get. Conventional loans are a common choice but not the only option to consider. Depending on your situation, you may qualify for other mortgage types, which may come with additional benefits and restrictions.

The five primary mortgage loan options are:

  • Conventional loan
  • FHA loan
  • VA loan
  • USDA loan
  • Jumbo loan
Conventional loan
FHA loan
VA loan
USDA loan
Jumbo loan
Minimum down payment
3%
3.5%
None required
None required
10% to 20%
Minimum credit score
620
580
600
620
680
Debt-to-income ratio (DTI)
Less than 45%
Less than 43%
Less than 41%
Less than 41%
Less than 43%
Insurance requirements
PMI with a down payment less than 20%
MIP with a down payment less than 10%
None
None
None
Other requirements
None
Verifiable income
Funding fee required
Must meet income requirements
None

Compare the different mortgage types to identify which ones you may qualify for and to determine the best option for your needs.

Get pre-approved

Before you get a mortgage, you can get pre-approved by a mortgage lender. During this process, a mortgage lender pre-approves you for a loan up to a specified amount based on your income, credit score, DTI, and other factors.

Upon pre-approval, the lender provides an official letter you can take with you as you search for homes. Getting pre-approved lets sellers know you are serious about buying a home and can sometimes improve the chances of your offer getting accepted.

Research properties

The real fun in the homebuying process, especially if you are a first-time home buyer, is finding the perfect property that meets your criteria.

You can work with a REALTOR® or real estate agent to locate potential homes or use online real estate marketplaces. Narrow down your search by filtering out properties well outside of your housing budget or desired area. It's also helpful to create a list of your needs and wants in a home to refer to as you search for homes.

Some of the factors to consider when searching properties include:

  • Age of the home
  • Home size
  • Property size
  • Home type
  • Number of bedrooms and bathrooms
  • Recent renovations
  • Potential problems
  • Storage space
  • Neighborhood
  • Local schools
  • Crime rates
  • Area amenities

Make an offer

Once you find the right home, it's time to make an offer. To make an offer on a home:

1. Determine how much you are willing to spend.

2. Consider which contingencies you want to include to protect yourself financially.

3. Decide how much earnest money you want to include as a good-faith deposit.

4. Submit your offer to the home seller.

5. Negotiate with the seller if they request changes to the offer.

Gather relevant documents

Applying for a mortgage is a straightforward process but it does require some time to complete. Mortgage lenders will ask you to provide extensive personal and financial information, which is used to determine eligibility for a mortgage loan and to set your rate. Save yourself time by gathering the following documents:

  • A copy of your driver's license or other government-issued ID
  • A copy of your Social Security card
  • A copy of the fully executed sales contract
  • Employment information
  • W-2 forms for the past two years
  • Recent pay stubs
  • Bank account statements
  • Investing account statements
  • Additional income documents
  • List of monthly debts
  • Alimony and child support documents
  • Down payment gift letters
  • References
  • Self-employment documentation
  • Property information if you own other properties

The information needed may vary depending on the lender. If you've chosen one, consult with your lender on what information you must provide during the application process.

Apply for a mortgage

Once you're ready, complete the mortgage application. Many lenders allow you to do this online. Fill out each section in full. Verify that all of the information provided is complete and accurate. Once you've double-checked the information, submit the application to the lender.

Go through the underwriting process

Before you are approved for a mortgage, you'll go through the underwriting process. Your lender may contact you with questions or ask you to provide additional information or documentation. Because mortgages are a significant financial commitment, the lender's underwriting team does a deep dive into your employment, income, and credit history to ensure you are worth the lending risk.

During the process, a home inspector will survey the home and property in person to ensure the home is in good working order and there are no potential issues. Depending on your agreement and offer contingencies, you may be able to back out of the purchase, adjust the offer, or request additional repairs before moving forward.

Your lender will also send an appraiser to the home to assess the property value and ensure it isn’t lending beyond the value.

Accept your mortgage loan

If you are approved for a mortgage, the lender will send closing documents and set a closing date. Follow the lender's instructions for paying the down payment and closing costs.

Read through all of the terms of the closing agreement to ensure it's correct. If everything looks good, sign the documents and close on the home.

What to do if you’re not approved for a mortgage

All hope is not lost if the lender doesn't approve you for a mortgage. It's a setback, but there are steps you can take to improve your chances of approval when you apply again.

  • Contact the lender: Reach out to the lender to find out why you were denied. Use the information provided to improve your chances next time.
  • Continue to improve your credit score: Keep paying off debt, paying your bills on time, and taking action to boost your credit score.
  • Search for another lender: Look for other lenders with requirements you're able to meet and that match your needs.

How to get a mortgage FAQ

How does pre-approval affect my credit score?

Getting a pre-approval for a mortgage can slightly lower your credit score, typically by about five points or more. This happens when a company pulls your credit report to gather information that will determine whether it will loan you money — a process known as a hard credit inquiry. However, if a company is only giving you a rate quote, or a soft credit inquiry, your credit score shouldn’t change.

What happens if I don’t use my pre-approval right away?

You can expect a pre-approval to be good for about 60 to 90 days, but double-check your pre-approval letter to find your expiration date. If your pre-approval does expire, you can go back to your lender and apply for another one.

How long does it take to get a mortgage?

The process can vary depending on your lender and other factors, but expect everything from applying to closing to take about 45 days. You can help things run more smoothly by having your documentation ready and keeping in contact with your lender in case anything else comes up. It also will take some time for your lender to double-check your financial situation and history to make sure you’re a good candidate.

Can I pay off my mortgage early?

If it makes sense for you financially, you can usually pay extra toward your mortgage if you choose. Some people might want to pay off their mortgages early if they’ve paid down other debts and have money to put toward it. Be aware that some loans have a prepayment penalty, so first find out if that applies to you. Make sure to examine your finances and determine if you’d rather pay off the mortgage early or save money for unexpected problems or big purchases.

Meet the expert:
Kevin Payne

Kevin Payne is a finance and family travel expert. He writes about credit cards, travel, student loans, saving money, homeownership, careers, and entrepreneurship. His work has appeared in Forbes Advisor, The Ascent, FinanceBuzz, Slickdeals, Student Loan Planner, and more. He is working toward accreditation as an Accredited Financial Counselor (AFC).