To secure a mortgage loan, first improve your credit score to at least 620-680 for conventional loans or 580-620 for FHA loans. Save for a 20% down payment to avoid private mortgage insurance (PMI), though 3-5% down payments are acceptable with PMI for conforming loans. Get pre-approved by a lender to strengthen your offer in competitive markets. Compare rates from at least three lenders using tools like the Consumer Financial Protection Bureau’s (CFPB) mortgage calculator. Finally, select a fixed-rate loan for stability or an adjustable-rate loan for lower initial payments if you plan to refinance soon.

Credit score optimization is critical because lenders use it to assess default risk. A higher score (e.g., 740+) typically qualifies for lower interest rates, saving thousands over the loan term. For example, a FICO score of 760 vs. 620 can result in a 1.5% rate difference, reducing monthly payments by $150 on a $300,000 loan (Federal Reserve, 2023). A 20% down payment eliminates PMI, which costs $100-$500 monthly on a $300,000 loan (Fannie Mae, 2023). Pre-approval increases offer acceptance by 50% (Zillow, 2022), as sellers favor pre-qualified buyers. Lender comparisons ensure competitive rates; the CFPB found a 0.5% rate difference between top and bottom lenders in 2023, saving $9,000 on a 30-year loan (CFPB, 2023). These steps collectively reduce borrowing costs and improve approval odds.