To secure a mortgage loan in the United States, individuals must first check their credit score, which typically needs to be at least 620 for conventional loans. They should calculate their debt-to-income ratio to ensure it stays below 43% for conforming loans or 55% for non-conforming loans. Next, borrowers must gather documentation such as pay stubs, tax returns, bank statements, and W-2 forms. They then select a loan type (e.g., fixed-rate, adjustable-rate, FHA, VA, or jumbo) based on their financial situation and goals. Finally, they submit a mortgage application through a licensed lender, which triggers an underwriting process to verify income, assets, and property value. Closing costs, including origination fees, appraisal, and insurance, must also be budgeted.

The process prioritizes credit score verification because lenders use it to assess default risk. A FICO score below 620 can lead to loan denials or higher interest rates, as data from the Consumer Financial Protection Bureau (CFPB) shows that 60% of applicants with scores below 580 are rejected. Debt-to-income ratios matter because lenders cap monthly payments at a percentage of pre-tax income to ensure repayment capacity. For example, a 43% DTI limit aligns with guidelines from Fannie Mae and Freddie Mac, which back most mortgages. Documentation ensures transparency; 75% of loan rejections in 2023 cited incomplete paperwork, per LendingTree. Loan type selection impacts affordability; fixed-rate loans offer stability, while FHA loans require only 3.5% down but impose mortgage insurance. Closing costs average $5,000–$8,000, as reported by the National Association of Realtors (NAR), making budgeting critical. Timely submission avoids delays; the average mortgage process takes 30–45 days, according to the Mortgage Bankers Association (MBA). This structured approach balances risk management with accessibility, ensuring loans align with borrowers’ financial realities.