How To Get A Mortgage: A Step-By-Step Guide

Getting a mortgage may seem complicated, but it doesn’t have to be. Whether you’re buying your first home or upgrading to your dream house, understanding the process can make everything smoother and a lot less stressful.  

From getting pre-approved to closing the deal, each step brings you closer to homeownership. And with Rate’s Same Day Mortgage application, you’ll have the tools and support to simplify the journey.*  

Follow these steps so you can focus on what matters most: finding the perfect place to call home. 

Getting a mortgage is all about breaking the process into manageable steps. Here’s what you need to know:

Mortgage pre-approval is the first step toward getting a mortgage and sets the foundation for your homebuying journey.  

This process allows a lender to review your financial information, such as your credit history, income and debts, to determine how much you could qualify to borrow. A pre-approval doesn’t just give you clarity on your budget; it also shows sellers you’re a serious buyer. 

Although often used interchangeably, pre-qualification and pre-approval are not the same.  

Pre-qualification is a quick estimate based on the basic financial details you provide.  

Pre-approval, however, involves a detailed overview of your financial standing, such as your credit history and available assets, making it much more a reliable gauge to determine your creditworthiness.  

If you've been pre-approved, your lender will issue a mortgage pre-approval letter, which outlines the loan amount you qualify for and serves as proof of your financial readiness.  

Sellers often consider offers more seriously when buyers have a pre-approval letter, making it a crucial part of the process. To get a favorable rate, ensure your financial information is up to date. 

With your budget in hand, it’s time to search for the perfect home. Work with a real estate agent who understands your priorities.  

When you find the right property, your agent will help you negotiate an offer that works for both you and the seller. Market conditions, an agreed-upon mortgage interest rate and other terms may all play a role during this stage. 

The underwriting process ensures everything about your application and the property checks out. Your lender will verify the details you provided, such as income and assets, and arrange for an appraisal to confirm the home’s value.  

The mortgage broker or service provider may also review additional documentation during this phase. Responding quickly to requests for additional information can speed things along and demonstrate your commitment to completing the process. 

Closing day is when it all comes together. You’ll sign the necessary documents, pay any remaining fees and officially take ownership of the home. Be prepared to cover expenses such as attorney’s fees or property taxes, depending on your location.  

This step marks the end of the mortgage process and the beginning of homeownership. Celebrate this milestone; you’ve just achieved one of life’s major financial goals! 

When you apply for a mortgage, lenders evaluate your financial profile to make sure you’re financially reliable. They focus on several major factors such as your credit history, income and debt-to-income (DTI) ratio to determine your eligibility. Here’s what they look for: 

Your credit score is one of the first things lenders check – and for good reason. It serves as a snapshot of how well you manage debt.  

A strong credit score typically often leads to better mortgage terms, such as lower interest rates and reduced fees. Even a small difference in your score could save you thousands of dollars over the life of the loan.** 

Most conventional loans have established credit requirements. Some government-backed loans, like FHA loans, accept scores as low as 580, and in certain cases, even 500 with a larger down payment option.   

To qualify for an FHA loan with Rate, borrowers need a minimum credit score of 500. For the 3.5% down payment option, a credit score of at least 580 is required. 

If you’re looking for a VA loan, the Department of Veterans Affairs doesn't set a minimum credit score. Rate does not require a minimum credit score though some lenders might look for a minimum score.  

If you have a strong credit score, 680 or higher, you’ll have access to more loan options with better terms, including favorable rates and reduced private mortgage insurance (PMI) requirements.*** 

Lenders prefer borrowers with stable incomes and consistent employment histories, as these indicate the ability to make timely payments.  

Typically, they like to see at least two years of steady work in the same field. Gaps in employment might raise concerns unless you can explain the circumstances. 

The salary needed depends on the home price, interest rates and other monthly financial obligations. For example, a $300,000 home with a 6% interest rate might require an annual income of around $80,000, assuming you have minimal debt.**** 

Using Rate’s mortgage calculator can provide better insights into how much money you’ll need based on your financial situation. 

Your DTI ratio is a crucial part of the mortgage process. It measures the percentage of your monthly income spent on debt payments, including your mortgage, credit cards and car loans.  

Most lenders prefer a DTI below 43%, but some may allow some strong borrowers looking at a conventional loan to have to up to 50% DTI. Other loans may accept applicant with a slightly higher DTI. 

Keeping your DTI low can lead to better mortgage terms and higher borrowing power. 

Lenders assess the type of property you’re buying because it affects the loan’s risk. Primary residences are considered the safest investments for lenders, so they typically come with the best terms.  

Vacation homes or investment properties carry higher risks and may require larger down payments and higher credit scores. Make sure to consider these conditions before finalizing your home purchase. 

Lenders also review your assets, such as savings, investments or retirement accounts, to ensure you have the financial reserves to cover unexpected expenses.  

Listed assets show that you’re prepared to handle costs like a down payment, monthly payments and closing fees. The bigger your financial cushion, the stronger your application will appear. 

When you apply for a mortgage, having the right paperwork in order can make a world of difference. It keeps the process moving and shows lenders that you’re ready to take the next step toward homeownership. Here’s some of the documents you’ll need to apply: 

Income documentation proves to lenders that you have a reliable way to make monthly mortgage payments. Pay stubs, W-2 forms and recent tax returns are standard requirements.  

If you’re self-employed or have non-traditional income, lenders may ask for additional proof, like 1099 forms or year-to-date profit and loss statements. Showing steady income reassures lenders of your financial stability. 

Lenders need a clear view of your financial standing. This includes bank account statements, retirement fund balances and investment account summaries. These assets demonstrate your ability to pay for your down payment, closing costs or other expenses.  

Additionally, you’ll need to show your liabilities, like car loans, student loans or credit card debt, so lenders can assess your overall financial picture. 

Your credit report and score are the first things lenders review. They offer a snapshot of your financial behavior, including your payment history and any overdue debts.  

Doublecheck your report for errors before submitting your application, as any inaccuracies could affect your approval odds or interest rate. If you see an issue, resolve it quickly to avoid delays. 

Navigating the sea of loan options can be overwhelming, especially for first-time buyers, but understanding your choices makes it easier to find a loan tailored to your needs. Different types of mortgages are designed to fit various first-time home buyers' financial situations and goals. 

Conventional loans are popular among buyers with strong credit and steady income. While they require a higher credit score and a larger down payment option than government-backed loans, they often come with competitive interest rates.  

If you can put down at least 20%, you’ll also avoid PMI, which can save you hundreds each month. 

Backed by the Federal Housing Administration, FHA loans are great for buyers with limited savings or lower credit scores. They require as little as a 3.5% down payment option for borrowers with a credit score of 580 or higher.  

However, FHA loans include mandatory mortgage insurance premiums (MIP), payable monthly, which add to your overall costs. 

If you’re considering a home purchase in a rural or suburban area, USDA loans might be your best bet. These loans, backed by the federal government, offer no down payment and competitive interest rates, but they’re only available for properties in eligible areas. You’ll also need to meet income limits, which vary by location. 

VA loans are a fantastic option for eligible veterans, active-duty military and their families. Backed by the U.S. Department of Veterans Affairs, VA loans require no down payment, no PMI and often come with more competitive mortgage terms than conventional loans.  

These loans are one of the most affordable ways to achieve homeownership for those who qualify. 

If you’re purchasing a high-value home that exceeds conforming loan limits, you’ll need a jumbo loan. The 2026 conforming loan limit for one-unit single-family homes is set at $832,750 in most areas. Jumbo loans require higher credit scores and larger down payment options but are essential for financing luxury properties. 

Getting a mortgage approval is about more than meeting basic qualifications. It’s about presenting yourself as a financially responsible and a low-risk borrower. Here’s how you can improve your chances. 

Lenders view a strong credit score as a sign of financial health. Do your best to pay your bills on time, lower your outstanding debt and avoid opening new credit accounts before applying.  

Even a small credit score increase can lead to better terms. 

A bigger down payment lowers the amount you need to borrow, potentially lowering your monthly payments and eliminating the need for private mortgage insurance (PMI).  

It’s a win-win for you and your lender. 

Lenders look for consistency, so even small changes can raise questions. 

Avoid switching jobs, making large purchases or taking on new debt while your application is under review.  

Reducing your DTI can make your application more appealing. Focus on paying off credit cards and other high-interest obligations to strengthen your financial profile. 

The key is preparation. By organizing your finances and being proactive, you’ll position yourself as a trustworthy borrower and make the process much smoother. 

Applying for a mortgage is easier than ever, especially when you have the right support. Start by connecting with a trusted lender like Rate to guide you every step of the way.  

Take your time to gather the necessary documents, review your finances and ask questions, no matter how small they may seem.  

With Rate's Same Day Mortgage, you can begin your journey to homeownership with confidence and clarity. Your dream home is within reach, and with the right tools and guidance, you’ll get there sooner than you think. 

_{Rate, Inc. is a private corporation organized under the laws of the State of Delaware. It has no affiliation with the US Department of Housing and Urban Development, the US Department of Veterans Affairs, the Nevada Department of Veterans Services, the US Department of Agriculture, or any other government agency. No compensation can be received for advising or assisting another person with a matter relating to veterans’ benefits except as authorized under Title 38 of the United States Code.} 

_{*Rate, Inc.’s Same Day Mortgage promotion offers qualified customers who provide certain required financial information/documentation within 24 hours of locking a rate on a mortgage loan the opportunity to receive a loan approval within 1 business day of timely submission of documentation and does not suggest that the borrower will receive funding on the same day as their application submission. For purposes of this offer, documents provided after 1 pm local time or on a weekend or company holiday will be deemed submitted the next business day. Rate, Inc cannot guarantee that a loan will be approved or that a closing will occur within a specific timeframe. Not eligible for all loan types or residence types. Self-employed borrowers are not eligible. Borrower's interest rate will depend upon the specific characteristics of borrower's loan transaction, credit profile and other criteria. Not available in all states. Restrictions apply. Visit rate.com/same-day-mortgage for terms and conditions.} 

_{**Savings, if any, vary based on consumer’s credit profile, interest rate availability, and other factors. Restrictions apply.} 

_{***Rate, Inc. does not provide credit counseling or credit repair services.} 

_{****Sample rate provided for illustration purposes only and is not intended to provide mortgage or other financial advice specific to the circumstances of any individual and should not be relied upon in that regard. Rate, Inc. cannot predict where rates will be in the future}