A must-have guide for homebuyers to confidently navigate the mortgage process
Getting a mortgage can feel overwhelming, especially if it’s your first time. Unexpected requests, missing paperwork, or unclear steps can lead to costly delays—or worse, losing out on the home you love.
The solution? Preparation.
This step-by-step checklist will help you stay ahead of the game, understand what lenders expect, and avoid last-minute surprises that could derail your home purchase.
Step 1: Get Financially Prepared
Check your credit report and score
Order your credit reports from all three major bureaus. Review for errors and aim for a score of at least 620. A score above 740 can help you secure better rates.
Reduce your debt-to-income ratio
Try to keep your total monthly debt payments (including your future mortgage) under 43% of your gross income. Paying down high-interest debt can improve your standing.
Avoid major financial changes
Don’t open new credit cards or finance large purchases during the mortgage process. Lenders will review your credit again before closing.
Step 2: Gather Required Documents
Most lenders will ask for the following:
- Two months of recent bank statements
- Last two pay stubs (or profit-and-loss statements if self-employed)
- Last two years of W-2s or tax returns
- A copy of your government-issued ID
- Proof of additional income (bonuses, alimony, etc.)
- Details about any large deposits in your account
- Current debt obligations (student loans, credit cards, auto loans)
Step 3: Choose the Right Loan Type
Take time to explore your options. Depending on your credit, income, and goals, you may qualify for:
- Conventional loans (ideal for strong credit and down payment)
- FHA loans (great for first-time buyers with lower credit)
- VA loans (for eligible veterans and service members)
- USDA loans (for qualifying rural homebuyers)
Discuss the pros and cons with a lender to find the best fit.
Step 4: Get Pre-Approved
Pre-approval gives you a clear idea of your budget and shows sellers you’re serious. This step involves a hard credit pull and a review of your financials.
Ask for a pre-approval letter that reflects your strongest purchase position without overextending your budget.
Step 5: Stay Responsive During Underwriting
Once you’re under contract and your loan is in process:
- Respond to requests from your loan officer quickly
- Don’t make large purchases or move money between accounts
- Stay employed and avoid career changes until closing
- Be ready for a second credit and income check before the final approval
Underwriting is where delays often occur—staying available and organized can keep things moving smoothly.
Step 6: Plan for Closing Costs and Final Details
Typical closing costs range from 2% to 5% of the home price. Your lender will provide a Loan Estimate and Closing Disclosure so you know exactly what to expect.
Be sure you:
- Have funds ready for your down payment and closing costs
- Understand when and where closing will take place
- Review all loan documents before signing
- Secure homeowners insurance before closing
Final Thought
The mortgage process doesn’t have to be mysterious or stressful. With the right preparation, documentation, and a clear understanding of each step, you’ll not only avoid surprises—you’ll move into your new home with confidence.
Use this checklist as your personal roadmap. And remember, a knowledgeable lender or real estate professional can be your best resource along the way.
