To apply for a mortgage to buy a home, follow these steps: First, check your credit score and address any inaccuracies or issues. A minimum score of 620-680 is typically required for conventional loans, while FHA loans may accept lower scores. Next, save for a down payment (20% is ideal to avoid private mortgage insurance) and closing costs (2-5% of the loan amount). Compare mortgage types (e.g., conventional, FHA, VA, or USDA loans) based on income, credit history, and property type. Gather essential documents, including pay stubs, tax returns, W-2 forms, bank statements, and employment verification. Submit a loan application to multiple lenders to secure competitive interest rates and terms. The lender will review your application, order a home appraisal, and underwrite the loan. Once approved, finalize the purchase by signing closing documents and transferring funds.

This process ensures lenders assess your financial readiness and property value accurately. A strong credit score reduces borrowing costs—FICO scores above 740 qualify for the lowest rates, saving up to 1% annually on a $300,000 loan. A 20% down payment eliminates PMI, which can cost $50-$100 monthly on a $300,000 loan. The Federal Reserve reports that 30-year fixed rates averaged 6.5% in 2023, making down payment size critical for affordability. Underwriting verifies income stability; 62% of rejected loans in 2022 failed due to insufficient documentation or income gaps. Appraisals prevent overpayment, with properties appraised 8-15% lower than asking prices in 2023 (Zillow Data). Thus, systematic preparation mitigates risks and secures favorable terms.