The Top 5 Essential Steps to Securing Your Mortgage

Buying a home is one of the biggest financial decisions you will ever make. To help you navigate the process with confidence, here are the five most important steps to getting a mortgage approved.

1. Check Your Credit Score Early

Before you even start looking at houses, you need to know where you stand financially. Your credit score is the single biggest factor affecting your mortgage interest rate. Review your credit report for any errors and pay down high-interest debt to boost your score before applying.

2. Determine Your True Budget

It is easy to get caught up in the excitement of "dream homes," but you need to know what you can realistically afford. Calculate your debt-to-income (DTI) ratio and factor in the hidden costs of homeownership, such as property taxes, insurance, and maintenance—not just the monthly mortgage payment.

3. Save for a Down Payment and Closing Costs

While a 20% down payment is ideal to avoid Private Mortgage Insurance (PMI), many lenders offer loans with as little as 3% to 5% down. However, don't forget to save for closing costs, which can range from 2% to 5% of the loan amount. Having this cash on hand is vital for a smooth transaction.

4. Get Pre-Approved, Not Just Pre-Qualified

There is a big difference between the two. Pre-qualification is a rough estimate, but a pre-approval means a lender has verified your financial documents and is willing to lend you a specific amount. A pre-approval letter proves to sellers that you are a serious buyer and gives you a competitive edge.

5. Shop Around for the Best Lender

Don't just accept the first offer you receive. Mortgage rates and fees can vary significantly between lenders. Compare offers from banks, credit unions, and online lenders. Even a fraction of a percentage point difference in your interest rate can save you thousands of dollars over the life of your loan.

We offer great information for all areas of Real Estate, buying, selling, or investing on the West Los Angeles Real Estate Group Website Blog.

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