To apply for a loan when buying a used home, first assess your credit score and financial readiness. Secure pre-approval from a lender to understand your budget and strengthen your offer. Gather documents like pay stubs, tax returns, bank statements, and W-2 forms. Compare loan types (e.g., conventional, FHA, VA) based on creditworthiness and down payment requirements. Submit a formal application with the lender, who will underwrite the loan by verifying details and assessing risk. Once approved, finalize the purchase with a signed purchase agreement and closing costs.

The pre-approval step is critical as it streamlines the buying process and increases offer acceptance rates. According to the National Association of Realtors (NAR), 30% of buyers who obtained pre-approval in 2022 received at least one offer within a week, compared to 15% of those without pre-approval. Lenders also prioritize pre-approved buyers, reducing delays caused by document rechecks. Credit scores directly impact loan terms; Fannie Mae data shows scores below 620 are denied 78% of the time, while scores above 740 secure lower interest rates (e.g., 3.25% vs. 5.5% for a 30-year fixed loan). Underwriting typically takes 3-7 days, but delays occur if documents are incomplete. Closing costs average $5,000-$15,000 (2-5% of the loan), with origination fees, appraisal, and title insurance as key components. Proactive preparation minimizes risks like loan rejection or financing falls-through, ensuring a smoother transaction.