Learn how to get a mortgage from financial prep through closing day, including credit, loan choice, preapproval, and the documents lenders review.
August 26, 2026
Getting a mortgage is an important step when you need to buy a home, as few people can afford to pay for a house entirely in cash.
Understanding the mortgage process can help you secure better terms, reduce long-term interest costs, and avoid mistakes that slow underwriting. As of the week of August 20, 2026, Freddie Mac's Primary Mortgage Market Survey put the average 30-year fixed rate at 6.65% and the 15-year fixed at 5.95%. So comparing lenders still matters at any rate level (Freddie Mac PMMS).
This guide walks you through everything you need to know about comparing mortgage purchase options, from improving your credit score to closing on your new home.
The mortgage process usually runs from weeks to a few months: you prepare finances, get preapproved, find a home, apply, complete underwriting, and close.
The process begins with reviewing your financial situation, followed by shopping for and then choosing a lender, and getting pre-approved. After finding a home and having your offer accepted, you'll formally apply for the mortgage.
The full journey often takes several weeks to a few months from first prep through closing.
Pre-approval timing varies by lender; many borrowers complete it within a few days when documents are ready.
House hunting and choosing a home may take 1-3 months.
Underwriting and processing after you apply often take several weeks, depending on the file, appraisal, and conditions.
Closing takes just a few hours once final approval is ready.
The lender will verify your financial information through underwriting before giving final approval. Federal rules also set disclosure timing. Lenders must give you a Loan Estimate within three business days of receiving your application (CFPB: What is a Loan Estimate?). They must give you a Closing Disclosure at least three business days before you close (CFPB: What is a Closing Disclosure?).
Several professionals help you secure a mortgage:
Loan officer or mortgage broker: Assists in determining the right mortgage product.
Real estate agent: Helps find suitable properties.
Lender's underwriter: Reviews your financial information.
Appraiser: Assesses the home's value.
Title company: Handles the paperwork and transfers ownership.
Most buyers choose among fixed-rate and adjustable-rate loans, then decide whether a conventional product or a government-backed option (FHA, VA, or USDA) fits their credit, down payment, and property type. You'll compare those paths in detail in the loan-choice section below.
You get ready by cleaning up credit, lowering debt relative to income, and stacking cash for the down payment, closing costs, and reserves lenders may require.
Your credit score range significantly impacts your mortgage options and interest rates. Exact minimums and pricing depend on the loan program, the full application, and each lender's overlays—stronger credit generally opens more choices and better pricing, but there is no single universal cutoff.
FHA loans are designed for lower down payments and more flexible credit than many conventional options; minimum score and down-payment combinations still depend on the full FHA and lender rules (HUD FHA overview). For USDA and VA loans, eligibility and credit standards are set by the program plus the lender you choose—confirm both before you apply (USDA SFHGLP; VA purchase loans).
Start by pulling your free annual reports at AnnualCreditReport.com, disputing errors, and keeping revolving balances lower relative to your credit limits. To improve your credit score, pay down credit card balances, keep old accounts open when it helps your history, and avoid opening new credit while you are in underwriting.
Lenders review your debt-to-income (DTI) ratio closely. Many aim for a moderate DTI, though automated underwriting and compensating factors can allow higher ratios on some files. This ratio compares your monthly debt payments to your gross monthly income.
To improve your DTI ratio, focus on paying down existing debts and consider increasing your income through a better-paying job or side gig. Just know employment changes mid-process can trigger fresh verification. For a deeper walkthrough of how DTI shows up in underwriting, see how debt-to-income affects a mortgage on BestMoney's related guide: how your debt-to-income ratio affects your mortgage.
Beyond the down payment, maintain an emergency fund separate from your home purchase savings. The CFPB suggests setting aside an emergency cushion of at least three to six months' worth of expenses when you size cash available for closing (CFPB: Determine your down payment). Some lenders may also ask to see cash reserves after closing—ask what your specific program requires.
You'll also need to save for closing costs on top of your down payment. The CFPB notes that closing costs (not including the down payment) typically range from about 2–5% of the home purchase price, though your total depends on price, location, loan type, and lender fees (CFPB: Determine your down payment). Common charges include appraisal fees, title insurance, lender fees, taxes, and prepaid items such as property taxes, homeowners insurance, and interest until your first payment (CFPB: fees paid at mortgage closing). Your Loan Estimate and Closing Disclosure show the dollar totals for your specific loan.
Loan type | Typical minimum down payment | Mortgage insurance / funding note |
Conventional | Often at least about 3% (CFPB) | PMI often required under 20% down (CFPB on PMI) |
FHA | 3.5% with qualifying credit (HUD) | FHA charges upfront and monthly MIP on insured loans (HUD FHA MIP) |
VA (eligible borrowers) | 0% down on many purchase loans (VA) | VA funding fee may apply unless exempt (VA funding fee and closing costs) |
USDA (eligible areas/borrowers) | 0% down when eligible (USDA) | USDA-backed guarantee for eligible rural buyers; property and income rules apply (USDA SFHGLP) |
You choose by matching rate structure, government vs. conventional backing, loan term, and lender pricing (rate, APR, and fees) to how long you'll keep the home and how much cash you can put down.
Pick a fixed-rate loan if you want stable payments for the full term; consider an ARM only if you understand reset risk and may move or refinance before adjustments begin.
Fixed-rate mortgages: Offer consistent interest rates and stable payments, making them well suited for long-term homeowners or periods when rates may rise.
Adjustable-rate mortgages: Provide lower initial interest rates for a set period before adjusting based on market conditions. These may fit short-term ownership plans but carry the risk of higher payments later.
Conventional loans generally favor stronger credit and larger down payments, while FHA, VA, and USDA programs expand access with lower (or zero) down payments when you meet program rules.
Product | Min. down (typical) | Credit snapshot | Insurance / fee notes |
Conventional | Often about 3%+ (CFPB) | Varies by lender and full file | PMI common under 20% down (CFPB) |
3.5% (HUD) | More flexible than many conventional overlays; lender/FHA rules apply | FHA charges upfront and monthly MIP on insured loans (HUD FHA MIP) | |
0% for many eligible veterans (VA) | Must meet VA and lender credit standards (VA) | Funding fee may apply (VA funding fee and closing costs) | |
USDA loans | 0% in eligible areas (USDA) | Lender and program eligibility rules apply (USDA SFHGLP) | Income and eligible-area limits apply |
If you need to borrow more than standard conforming loan limits allow, you may need a jumbo loan—confirm current limits and underwriting rules with lenders before you shop.
Choose a longer term for lower monthly payments or a shorter term if you can afford higher payments and want to pay less interest overall.
When choosing between 15-year, 20-year, and 30-year mortgage terms, consider your budget. Longer loan terms result in lower monthly payments, while shorter terms mean higher monthly payments but significant interest savings.
Your ownership timeline also matters. If you're planning to sell within a few years, a 30-year mortgage might make sense due to the lower monthly payments. If you intend to stay long-term, a shorter loan term builds equity faster and saves on total interest paid.
Shop at least three lenders the same day when you can, and compare interest rate, APR, lender fees, rate-lock length, and how responsive each team is, not the headline rate alone.
Even a fraction of a percentage point can change your total interest over a long amortization schedule, so small differences compound. Obtain written Loan Estimates so you can compare APRs and fee line items side by side. Ask how long a rate lock lasts, what happens if closing slips, and whether discount points are optional.
You get preapproved by letting a lender verify income, assets, and credit and issue a letter that states how much you may borrow, ideally before you write offers.
A preapproval letter shows sellers you're a serious buyer with financing under review, which can make your offers more competitive. It also helps you shop within a realistic price range instead of guessing.
Prequalification vs. preapproval: Lenders use these labels differently, so ask what they verified. The CFPB notes both letters state how much a lender may be willing to lend based on assumptions and are not guaranteed loan offers. Prequalification is often based on unverified, self-reported information; preapproval more often uses verified information. Either letter can help sellers take an offer seriously, but neither is final approval (CFPB: prequalification vs. preapproval). Confirm with each lender what was checked, whether they did a hard or soft inquiry, and how long the letter remains valid.
Have basic documents ready early: recent pay stubs or tax returns, bank statements, ID, and a list of debts. First-time buyers can pair preapproval with a structured checklist such as BestMoney's first-time home buyer checklist.
After your offer is accepted, you submit a full application with supporting documents, receive required disclosures, complete underwriting and appraisal, then close once the lender issues final approval.
The mortgage application process requires documentation to verify your financial situation, including:
Identification: Driver's license and Social Security Number
Income verification: Recent pay stubs, W-2 forms, and tax returns
Financial statements: Bank statements for all accounts
Asset documentation: Proof of down payment funds
Debt information: Statements showing balances of significant debts
Pro tip: Self-employed borrowers need additional documentation, including tax returns and profit/loss statements.
After you apply, the file moves through processing, underwriting, appraisal, final approval, and closing disclosures on a regulated timeline.
Submit your application: Complete the mortgage application form with personal and financial information.
Receive your Loan Estimate: Lenders must provide a Loan Estimate within three business days of receiving your application so you can review rate, payments, and estimated closing costs (CFPB: What is a Loan Estimate?).
Provide documentation: Gather and submit all required documents for income and asset verification.
Credit check: The lender will pull your credit report to review your score and history.
Loan processing: A processor organizes your information and prepares it for underwriting.
Rate lock (when ready): You and the lender agree on lock length so your rate is protected while the file finishes, ask what happens if the closing date moves.
Underwriting review: The underwriter evaluates your application against lending standards.
Home appraisal: A professional appraiser determines the property's value.
Final approval: After all conditions are met, the lender issues final loan approval.
Closing Disclosure and closing prep: You'll receive a Closing Disclosure with final loan terms and costs at least three business days before you close (CFPB: What is a Closing Disclosure?).
Underwriting is the lender's verification step that confirms you still qualify and that the property supports the loan amount.
During underwriting, the lender verifies your employment, income, assets, and credit history. They'll also order an appraisal to confirm the home's value.
Common underwriting delays include job changes, opening new credit accounts, and appraisal issues. To avoid these problems, maintain employment stability and refrain from new credit applications during the mortgage process.
You prepare by reviewing the Closing Disclosure, arranging certified funds, and bringing required ID so ownership and the loan can fund on schedule.
To prepare for closing day, review your Closing Disclosure at least three business days before closing (CFPB: What is a Closing Disclosure?). Arrange for a cashier's check or wire transfer to cover your down payment and closing costs. Remember to bring proper identification and any additional requested documents.
Closing costs include appraisal fees, title insurance, and loan origination fees. Some fees may be negotiable, particularly certain lender charges and third-party services, compare your Loan Estimate to the Closing Disclosure line by line before you sign.
Avoid late credit cleanup, borrowing your full max approval, ignoring rate moves, and major financial changes mid-underwrite.
A common error when getting a home loan is not checking and improving your credit score early enough. Start working on this at least six months before applying.
Changing jobs or taking on new debt during the mortgage process can derail your application, as lenders verify employment and re-check credit before closing. Don't open new credit cards or finance large purchases until after you have the keys.
Another mistake is maxing out your pre-approved mortgage amount without leaving room for emergencies or other expenses. Just because you qualify for a certain loan amount doesn't mean you should borrow the maximum.
Leave a buffer in your budget for home maintenance, emergencies, and lifestyle expenses.
Staying informed about housing and mortgage market trends is essential. Keep an eye on Federal Reserve interest rate decisions and published averages such as Freddie Mac's weekly survey to understand the backdrop for your quotes. Consider rate lock options when you find favorable terms, as rates fluctuate frequently.
If credit, down payment, or income is tight, a co-signer or local down payment help may open doors. A longer prep timeline can also help. Then compare lenders that fit your profile instead of stopping the search. Lease-to-own is less common and still needs careful legal review. Most buyers are better served getting preapproved and comparing purchase loans that match their eligibility.
If you're a first-time buyer learning how to get a mortgage end to end
If you're a move-up buyer who needs a clean preapproval before listing or shopping
If you may qualify for VA or USDA zero-down paths and want program basics first
If you're rebuilding credit and need realistic score and DTI targets before you apply
If you're deciding between fixed-rate and ARM structures or 15- vs. 30-year terms
Turn this guide into a short action list this week so you're ready when the right home appears.
Pull your credit reports and map a score-improvement plan if you're below your target band.
Estimate a comfortable monthly payment and cash needed for down payment plus closing costs and prepaids.
Request preapproval from two or three lenders and compare Loan Estimates side by side.
Continue comparing mortgage purchase options while you read deeper guides on FHA loans, VA loans, and credit improvement.
Lenders look at your credit score, income, employment history, debt-to-income (DTI) ratio, down payment or reserves, and overall financial stability, not a single "magic" income number.
It depends on the loan type. The CFPB notes that in most cases you need a down payment of at least about 3% of the home price, and many loans require 5% or more (CFPB). FHA loans require a minimum of 3.5% with qualifying credit (HUD), while VA and USDA loans may offer 0% down for eligible borrowers (VA; USDA). On a conventional loan, PMI is often required with less than 20% down (CFPB on PMI).
Expect to provide pay stubs, W-2s or tax returns, bank statements, identification, employment verification, and details of your debts and assets. Self-employed borrowers usually need extra tax returns and profit-and-loss detail.
Lenders define the terms differently. Per the CFPB, both letters reflect how much a lender may be willing to lend based on assumptions and are not guaranteed offers. Prequalification is often based on unverified self-reported information, while preapproval more often relies on verified information. Letters can strengthen an offer with sellers, but they are not final approval—ask what was verified (CFPB: prequalification vs. preapproval).
Preapproval can take a few days when your documents are ready. The stretch from accepted offer through underwriting and closing often takes several weeks, and the full prep-to-keys journey can run longer depending on house hunting and loan conditions.
For this refresh we relied on primary and secondary sources, not a new BestMoney consumer survey. Rate context comes from Freddie Mac's Primary Mortgage Market Survey. Disclosure and fee guidance comes from Consumer Financial Protection Bureau explainers on the Loan Estimate, Closing Disclosure, closing costs, and prequalification vs. preapproval. Program rules draw from HUD's FHA overview and FHA MIP guidance plus VA and USDA pages. Free credit-report access points to AnnualCreditReport.com. We also reviewed how top educational results structure the buyer journey (prep, preapproval, application, close) without importing competitor statistics or outbound links to rival comparison sites.
David Kindness is a finance, insurance and tax expert at BestMoney.com. He has written for Investopedia, The Balance, and Techopedia, sharing his deep expertise in taxation, accounting, and finance. A CPA with a Bachelor’s in Accounting, David has worked as a tax specialist and Senior Accountant for high-net-worth clients and businesses in the San Diego area.