To secure a loan after a one-time house purchase, first assess your credit score and financial stability. A minimum FICO score of 620 is typically required for conventional loans, while FHA loans accept scores as low as 580. Next, determine the loan type: conventional (no government backing), FHA (3.5% down payment), VA (no down payment for veterans), or USDA (rural areas). Calculate your debt-to-income ratio (DTI) to ensure it stays below 43% for most loans. Secure pre-approval from a lender to strengthen your offer. Finally, compare interest rates, terms, and closing costs across multiple lenders.

The process prioritizes creditworthiness and down payment size because lenders evaluate risk based on repayment capacity and equity. Data from the Consumer Financial Protection Bureau (CFPB) shows 62% of denied mortgage applications in 2022 were due to insufficient credit scores or high DTIs. For example, FHA loans require a 3.5% down payment, but conventional loans with 20% down avoid private mortgage insurance (PMI), saving borrowers up to $100 monthly on a $300,000 loan. The Federal Reserve reports average 30-year fixed rates at 6.5% in 2023, with FHA loans at 7.1% and VA loans at 6.2%, reflecting risk-based pricing. Additionally, 75% of homebuyers opt for 20-year terms to reduce interest costs, per the National Association of Realtors. These factors collectively ensure lenders minimize defaults while maximizing affordability for borrowers.