How to Get a Mortgage

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To get a mortgage, you’ll need to check your credit score, gather financial documents and shop for mortgage options before even getting to the application process.

Everyone talks about moving into their dream home, but very few people talk about how to get a mortgage. A study by JW Surety Bonds found that one out of every five prospective homebuyers delayed a home purchase due to confusion around financial literacy, and 27% were “surprised by unexpected fees during the homebuying process.”

That’s where we come in. We spoke with Jason Lerner, a 22-year veteran of the mortgage industry and area manager for First Home Mortgage, to explain the mortgage application process that he’s walked thousands of clients through. 

His first piece of advice: Enlist the help of a trusted lender. “They can really give you direction and point out things that you may not have been aware of,” Lerner says. 

Once you’ve done that, read on to find out how you can get the best mortgage for your needs. 

How to Get a Mortgage in Eight Steps 

Getting a mortgage requires some persistence and research. The best mortgage lenders for first-time homebuyers can help guide you through the following steps:  

Step 1: Get Your Financial House in Order

Getting your finances straightened out is a key part of the home buying process. Consider your total budget and economic goals, which can help determine what type of house you can afford. Ideally, you’ll want to spend no more than one-third of your total income on your mortgage and other debt payments. 

Lenders and other real estate experts stress the importance of having a good credit score and for good reasons. Your creditworthiness not only determines your chances of being approved for a mortgage, but will also affect what type of interest rate you’ll be charged. 

Lerner says this is the first place where having a trusted lender comes in handy. “Without the guidance of a trusted professional, you may pay things off that are counterproductive or don’t have that much of an impact on your total score,” he says. Have your lender or another financial professional look at your credit reports and come up with a plan to get you the highest score possible. 

A credit score of 640 will likely get you the best interest rate and terms for a mortgage loan. If you have a score on the lower end of the spectrum, expect to pay more interest at a higher rate.  

How a Lender Determines What You Can Afford

Lenders determine whether or not you can afford a mortgage payment by calculating your debt-to-income (DTI) ratio. A higher DTI could mean your loan poses a higher risk, which might result in a higher interest rate.

Debt to Income Calculation

Add up the minimum monthly payments on all debt (car payments, installment loans, credit cards, etc.). Also, include the new mortgage principal, interest payment and the monthly figure for taxes and insurance.

Income is your monthly gross pay before any deductions.

DTI = (total debt/income) * 100

35% or less is optimal, 36% to 49% could use some work and 50% or higher may result in a mortgage denial.

Step 2: Determine the Right Mortgage

You can choose from various types of mortgages, including conventional, FHA, USDA, VA or jumbo loans. You can also look at mortgage terms from 15 to 30 years. 

Mortgage Types

Here is an overview of the most common types of mortgages. 

• Conventional loans: Conventional mortgages may require a higher credit score and down payment than mortgages backed by a government agency. 
• USDA Loans: A USDA home loan is backed by the U.S. Department of Agriculture and is available for people who want to buy a home in a designated rural area. You can check the USDA's website to see which areas are eligible. To qualify, your household income should equal or be less than 115% of the area's median income. 
• FHA Loans: An FHA loan is a mortgage insured by the Federal Housing Administration that allows first-time homebuyers to purchase, renovate or build a house. 
• VA Loans: The Department of Veterans Affairs backs VA loans for active-duty and retired service members. 
• Jumbo Loans: A jumbo mortgage is a mortgage loan for an amount higher than standard conforming loan limits. For 2025, the upper limit is $806,500 or $1,209,750 in high-cost areas. 

Mortgage Rates

Mortgage rates can be fixed or variable. 

• Fixed-rate mortgage: A fixed-rate mortgage will have the same annual percentage rate (APR) for the duration of the loan. 
• Adjustable-rate mortgage: An adjustable-rate mortgage will readjust interest rates or APR regularly. For example, a 5/1 adjustable-rate mortgage has a fixed rate for the first five years and the interest rate readjusts once a year. 

Deciding between the two, Lerner says, often comes down to how long you plan on staying in the house and market conditions. As of this writing, interest rates are not likely to decrease significantly any time soon, so if you’re planning on remaining in the home for many years a fixed rate might be the better option. 

Mortgage Terms

• 30-year mortgages: A 30-year mortgage is the most common term, lasting 30 years. 
• 10- or 15-year mortgages: A 10- or 15-year mortgage term means you can save significantly on interest over the loan's lifetime. You'll own the home outright sooner, but you'll also need to pay substantially more in monthly mortgage payments. 

Step 3: Research Mortgage Lenders

It's a good practice to research and compare multiple mortgage lenders to get the best rates. You can compare APR, fees, customer service and lender reputation. To start, compare lenders online and check local banks and credit unions. 

Step 4: Secure Preapproval for a Home Loan

Applying for a mortgage starts with pre-approval. A pre-approval basically states that a borrower is likely to qualify for a home loan up to a certain amount and shows the seller and/or realtors that you’re serious about putting an offer on the property.

“I don’t think people should look at homes without a pre-approval,” Lerner says.

Get all the documents needed for a mortgage pre-approval together and have them ready. 

Step 5: Begin Searching for a New Home

Be sure to work with a trusted real estate agent and focus on the neighborhoods, areas or amenities that are your priorities. Filtering your search to key priorities can help save time and hone in on the properties you will likely want to consider. 

Step 6: Prepare and Submit Your Loan Application

Next, you'll want to prepare all the documents to submit and finalize your mortgage application. A lender can’t close your loan without the proper documentation and a failure to provide information promptly could cause closing delays. Therefore, it's essential to get all the requested documentation promptly. 

• Income: The last two pay stubs showing the pay period, YTD earnings and the previous year's W-2s. If you're self-employed, you must supply bank statements or other proof of income. 
• Tax Returns: Have the last 2-3 years of tax returns 
• Asset Statements: Bank statements for savings or checking accounts plus 401(k). Funds from closing, including down payment, must be traceable in an account for at least 90 days. Stashed cash doesn't count; it must be deposited in an account.
• Sales Contract: Once you have signed a sales contract for your dream home, forward it to your lender so that the process can move forward.

Once you have your house picked out, documentation in order, your financial picture sound and you can afford all expenses, it’s time to apply for that loan.  Call your bank to schedule an application appointment or apply online. Additional documentation may be required, so be patient and prompt with the process.

Step 7: Start the Underwriting Process

During the underwriting process, the lender will verify all the information you provided, double-check the documents sent and organize a home appraisal to confirm the loan-to-value ratio on the loan. 

At this stage, you'll need to follow up on all contingencies in the sales contract. If you are getting a home inspection, schedule and complete it in the allotted time frame.

You must also obtain homeowners insurance before closing and provide proof to the lending officer. You must pay for the first year of insurance upfront before closing. So, if you plan on shopping around, do so promptly and don’t wait until the last minute. The application process can be tedious and stressful, but it’s worth it.

Step 8: Close on Your House

Once all contingencies are met, it's time to close on the home. Be prepared to pay the closing costs. These can include appraisal fees, credit check fees, title insurance fees, attorney fees, recording fees, etc. Note that the lender will check the home's appraised and market value, which can be worth double-checking. 

This is the final stretch of the homebuying process. You must sign the sales contract, make any relevant transfers and close. 

The Bottom Line 

• How to get a home loan starts with thorough preparation and research
• You’ll need to get a mortgage pre-approval before making an offer on your home
• If your documents are ready, you could close on your new home in under 30 days
• Research mortgage types, terms and the best mortgage lenders before starting your home search

Why You Should Trust Us

Benzinga has offered investment and mortgage advice to more than one million people. Our experts include financial professionals and homeowners such as Anthony O’Reilly, the writer of this piece. Anthony is a former journalist who’s won awards for his coverage of the New York City economy. He’s navigated tricky real estate markets in New York, Northern Virginia and North Carolina.

For this story, we worked with Jason Lerner, an area manager for First Home Mortgage and a 22-year mortgage industry veteran. 

Frequently Asked Questions

Sources

• JW Surety Bonds, “Are Americans Prepared for Homeownership? A Look at Knowledge Gaps,” https://www.jwsuretybonds.com/blog/home-owning-literacy 
• Federal Housing Finance Agency, “FHFA Announces Conforming Loan Limit Values for 2025” https://www.fhfa.gov/news/news-release/fhfa-announces-conforming-loan-limit-values-for-2025 
• Jason Lerner, area manager for First Home Mortgage and a 22-year mortgage industry veteran.