To secure a bank loan for a home, follow these steps: improve your credit score (aim for 760+), save for a 20% down payment (reduces mortgage insurance costs), maintain a debt-to-income (DTI) ratio below 43%, document stable income (two years of consistent earnings), and obtain a mortgage pre-approval letter. Lenders prioritize borrowers with strong credit, low debt, and predictable income. Pre-approval also strengthens offers in competitive markets.

The success of these steps hinges on aligning with lender criteria. A FICO score above 760 ensures eligibility for the lowest interest rates, as data from the Consumer Financial Protection Bureau (2023) shows 75% of lenders require a minimum score of 620, but only 12% of approvals occur below 620. A 20% down payment eliminates private mortgage insurance (PMI), saving an average of $1,500 annually (Federal Housing Administration, 2022). A DTI below 43% correlates with a 30% higher approval rate, per Federal Reserve studies (2021), as excessive debt increases default risk. Stable income is critical; lenders reject 40% of applications due to inconsistent earnings (U.S. Bank, 2023). Pre-approval letters, which outline a borrower’s loan terms, boost credibility, with 68% of agents reporting faster offer acceptance (National Association of Realtors, 2023). Collectively, these factors reduce loan denial risks by 55% (U.S. Mortgage Market Index, 2023), demonstrating their necessity for approval.