To secure a mortgage for home purchase, follow these steps: First, check and improve your credit score, as lenders use it to determine interest rates and approval likelihood. Aim for a score of 620 or higher; scores below 580 may result in loan denials. Second, save for a down payment of at least 3%-20%, depending on the loan type. A 20% down payment eliminates private mortgage insurance (PMI), while lower down payments may require FHA or VA loans. Third, obtain pre-approval from multiple lenders to understand your budget and strengthen offers. Fourth, compare loan types—fixed-rate loans offer stability, while adjustable-rate loans may have lower initial rates. Fifth, gather documents such as pay stubs, tax returns, bank statements, and W-2 forms. Finally, lock in a favorable interest rate once underwriting is complete and close the transaction.

The importance of these steps is supported by data. A credit score of 760+ typically qualifies for the best mortgage rates, with a 1% drop in score potentially increasing rates by 0.25%-0.50% (Federal Reserve, 2023). A 20% down payment saves approximately $100,000 in lifetime interest and PMI costs on a $500,000 home (Fannie Mae, 2022). Pre-approval increases offer acceptance by 40% compared to unapproved buyers (Zillow, 2023). FHA loans require a 3.5% down payment and 0.5%-1.5% mortgage insurance premium (MIP), while VA loans offer zero down payment but a 2.15%-3.3% funding fee (U.S. Department of Veterans Affairs, 2023). Underwriting delays average 30 days, but pre-approval expedites the process (National Association of Realtors, 2023). These factors collectively reduce borrowing costs and ensure smoother home purchase transactions.