To mortgage a property in the United States, follow these steps: 1) Check your credit score (minimum 620 for most loans) and improve it if necessary. 2) Calculate debt-to-income ratio (DTI) to ensure it stays below 43% for conforming loans. 3) Compare loan types: fixed-rate (36-month average rate 6.5% in 2023) or adjustable-rate (3.2% initial rate in 2023). 4) Secure pre-approval from a lender using documents like pay stubs, tax returns, and bank statements. 5) Make an offer on the property and negotiate terms. 6) Submit a mortgage application with a loan estimate (featuring closing costs averaging $5,000). 7) Underwriters review the application and verify financials. 8) Sign closing documents at a title company or escrow office, paying a down payment (3-20% of purchase price). 9) Finalize the mortgage with a first lien recorded on the property.

The mortgage process relies on strict underwriting criteria to minimize default risk. Credit scores directly impact interest rates; a 700+ score qualifies for the best rates (4.5-5.5%), while scores below 620 face higher rates or denial. The Consumer Financial Protection Bureau (CFPB) reports 63% of rejected applicants had scores below 620 in 2022. Debt-to-income ratios exceeding 43% lead to loan denial, as per Federal Reserve data. Down payment requirements vary: conforming loans (≤$765,800) need 20% down, while FHA loans accept 3.5% (with mortgage insurance). Closing costs typically total 2-5% of the loan amount, including origination fees (1-1.5%), appraisal ($500-$1,000), and title insurance ($500-$1,500). The 28/36 rule mandates housing expenses ≤28% of income and total debt ≤36%. For example, a $300,000 loan at 6.5% over 30 years requires $1,935 monthly payments, with $8,700 total interest. Lenders use these metrics to ensure repayment capacity, reducing defaults to 2.5% in 2023 (FDIC). Automated underwriting systems (e.g., Fannie Mae’s Desktop Underwriting) process 80% of loans, improving efficiency while maintaining compliance with fair lending laws.