Buying a home is a big step, and getting approved for a mortgage is often the part people dread most. It doesn’t have to be that way. If you understand what lenders look for and what steps to take, the entire process becomes more predictable—and way less stressful. Here’s a clear breakdown of how to secure a home loan and make your path to homeownership smoother from the start.
Know What You Can Afford Before You Secure a Home Loan
Before reaching out to a lender, take a hard look at your finances. Lenders will, and they won’t just glance—they’ll dissect everything. Income, debts, credit history, employment, savings—it all goes under the microscope.
You don’t need a perfect credit score or a massive down payment, but you do need a clear picture of what you can realistically handle. Calculate your monthly income, subtract any ongoing debts, and use a mortgage calculator to estimate how much house you can afford.
Going in with this number will help you avoid wasting time on homes outside your range and strengthen your application when the time comes.
Clean Up Your Credit Early
Lenders use your credit score to decide if you’re a safe bet. A higher score usually means better loan terms and lower interest rates. Pull your credit reports early and make sure everything is accurate.
If you see errors, dispute them. If you’ve got late payments or high balances, start cleaning that up. Pay down credit card debt. Don’t open new credit lines. Keep everything stable.
Most lenders want to see at least a 620 score, but the higher, the better. A solid credit history shows lenders you’re consistent and responsible, which is what they care about.
Get Pre-Approved, Not Just Pre-Qualified
Pre-qualification is a soft estimate. Pre-approval is the real deal. When you’re pre-approved, a lender has actually reviewed your financials and conditionally committed to a loan amount.
This step gives you clarity on what you can spend, and shows sellers you’re serious. If you’re up against other buyers, a pre-approval letter can make the difference.
To get pre-approved, you’ll need to provide recent pay stubs, W-2s or tax returns, bank statements, and permission for the lender to pull your credit. It’s not complicated if you have your paperwork in order.
Choose the Right Loan for Your Situation
Not all home loans are created equal. There are several loan types available, and the right one depends on your income, down payment, and long-term plans.
Conventional loans are ideal for buyers with good credit and a decent down payment. FHA loans are more flexible on credit and down payment, but come with mortgage insurance costs. VA loans are available for veterans and active-duty service members and often require no down payment.
Discuss your options with your lender. A good one will walk you through each and help you decide what fits your goals and your finances—not just what you qualify for.
Don’t Make Big Changes While Working to Secure a Home Loan
Once you’ve applied, don’t switch jobs, take on new debt, or make large deposits into your account without documenting them. Lenders monitor your financial activity right up to closing. A sudden change can derail your approval.
Keep things steady. If you need to do something out of the ordinary, tell your lender first. Surprises slow things down, and in some cases, they can kill the deal.
Be Ready to Respond Quickly
Once you’re under contract, things move fast. The lender may ask for additional documents, letters of explanation, or updated bank statements. Respond as quickly as possible. Delays on your end can create unnecessary stress or push your closing date back.
Treat this part like a short-term job. Stay organized, check your email, and keep your phone handy. The smoother your communication, the faster the process moves.
FAQs on How to Secure a Home Loan
How much do I need for a down payment?
It depends on the loan. Conventional loans often require 5% to 20%, while FHA loans allow as little as 3.5%. VA loans and USDA loans may require zero down if you qualify.
Can I get a mortgage with bad credit?
Yes, but it’s harder. FHA loans are more lenient with lower credit scores. Expect to pay higher interest rates and possibly more upfront costs.
How long does the loan approval process take?
It typically takes between 30 to 45 days from application to closing, depending on how quickly you respond to requests and how complex your financial picture is.
What’s the difference between interest rate and APR?
The interest rate is what you pay to borrow the money. APR includes that rate plus any lender fees, points, or other costs, giving you the true cost of the loan over time.
Is it better to go with a bank or a mortgage broker?
Banks offer their own products. Brokers shop around for the best deal among multiple lenders. A broker might find you better terms, but it depends on your situation.
What documents will I need to apply?
You’ll need recent pay stubs, W-2s or tax returns, bank statements, a photo ID, and possibly additional items depending on your employment or financial setup.
Jones & Cooper Home Inspections provides home inspections to customers in the Metro Louisville area. Contact us to request our services.