To obtain a mortgage for a residential property from a bank, follow these steps: First, check your credit score and address any discrepancies to ensure eligibility. A minimum score of 620–680 is typically required for conventional loans, while FHA loans may accept lower scores. Second, calculate your debt-to-income ratio (DTI), which should not exceed 43% for conforming loans. Third, save for a down payment of at least 3%–20%, depending on the loan type. Fourth, obtain pre-approval from multiple lenders to understand borrowing limits and strengthen offers. Fifth, compare interest rates, loan terms, and fees using tools like the Consumer Financial Protection Bureau’s (CFPB) mortgage calculator. Sixth, submit a formal mortgage application with documentation (pay stubs, tax returns, bank statements, property appraisal). Finally, await underwriting, which may include a home inspection and title search, before closing.

The process prioritizes creditworthiness, affordability, and lender risk assessment. A 2023 Federal Reserve report found that 68% of mortgage denials occur due to high DTI ratios or insufficient down payments. Fannie Mae’s 2023 data highlights that 3% down payments now require private mortgage insurance (PMI), increasing monthly costs by 0.5–1.5%. Pre-approval reduces offer competition, with 89% of homebuyers in a 2023 National Association of Realtors survey reporting success after pre-approval. Lenders favor applicants with DTIs below 36% and credit scores above 740, as these correlate with lower default risks. For example, a 2022 CFPB study showed that borrowers with DTIs exceeding 43% faced 22% higher denial rates. Additionally, 72% of banks require a 20% down payment for conforming loans to avoid government-backed insurance, per the Urban Institute’s 2023 analysis. These factors collectively ensure lenders minimize risk while enabling homebuyers to secure affordable financing.