How to Qualify for a Mortgage

You don’t want to search for a home first and then find out if you qualify for it. If you have your heart set on a home, but later find out the bank won’t approve you, you could set yourself up for some major heartbreak. 

Take these steps to qualify for a mortgage, then get to the fun stuff — searching for your home!

Step 1: Check your credit report first. 

A lender will check your credit score during the mortgage process because it helps lenders determine how you pay back debt. Lenders typically look for a credit score of at least 620, though this mixes with factors like your debt-to-income ratio, down payment amount and more. 

However, you want to check your credit report because many people find issues with their reports every year — loans that are still outstanding but which have actually been paid off, loans in your name that actually belong to someone else, etc.

Step 2: Compare lenders.

You don’t necessarily need to choose the most popular bank in your small town as your lender. You want to shop around by looking into various interest rates, fixed-rate mortgage and ARM options and customer service responses for particular lenders. 

Meet with lenders and ask questions about the following: 

  • Explain your situation and types of loans you might consider.
  • Ask a loan officer what they might recommend for your situation. 
  • Get an idea of the interest rate, fees and monthly payments for the loan options recommended.

Step 3: Get pre-approved.

You may hear about pre-qualification and pre-approval during the mortgage process. Lenders who help you get prequalified ask that you provide some financial information before running your credit report with asset and income documentation verification. It’s a looser set of terms that may not end up being fully accurate when you actually apply for a mortgage. 

A pre-approval goes one step further — it involves a credit check as well as an estimate of your income and savings. 

Whenever possible, get a pre-approval. It’s usually more thorough or more accurate than a pre-qualification. 

Step 4: Assemble your loan paperwork.

You must first provide the necessary financial information requested by your lender, which will include: 

  • Two years’ worth of W-2 forms
  • A month’s worth of pay stubs
  • Income tax returns
  • Income tax returns, current profit and loss statement and list of all business debts if self-employed
  • Other financial information, such as how much money you have in savings, checking accounts and other types of assets such as stocks, bonds, etc.
  • Any other information your lender needs to know

Your lender will also want to confirm your down payment amount. Make sure you’ve saved enough for a down payment and closing costs. You may want to put down at least 20 percent on a conventional loan so you don’t have to pay private mortgage insurance (PMI). PMI is a payment you make each month to protect your lender if you can’t make your loan payments.

Step 5: Find the right real estate agent.

Certain online mortgage processes can occur quickly. This gives you an extremely accurate mortgage approval that you’ll be able to use with confidence when you’re getting ready to make an offer on a home.

Therefore, you’ll want to find the right real estate agent for your needs. 

As a buyer, you can work with a real estate agent for free because the seller pays the real estate agent’s commission. Your agent will work on your behalf to show you properties, write an offer letter and help you negotiate. Real estate agents work hard to make sure you jump through all the legal hoops in the buying process.

The real estate agent and lender will walk you through the rest of the home-buying process, which includes: 

  • Making an offer on a home.
  • Getting a home inspection.
  • Getting a home appraisal done.
  • Making sure you ask for the right repairs.
  • The closing process.

Along the way, make sure you ask plenty of questions to make sure you understand every part of the process. Once you’ve gone through the process once, you might want to move in a few years and the process begins again. Except this time, you might need to sell your current home. If you keep your real estate agent’s card, chances are, that individual might be able to help you sell your home as well.

Get a Mortgage the Right Way

As you can see, you’ll walk through a lot of steps to get the right mortgage for you. Your lender will want to make sure you have a good credit score, can show consistent income and have sufficient assets. Your real estate agent will want to know everything on your “wishlist” for your perfect home, among other things. 

Get all the information ready for each party so the home-buying process goes off without a hitch. Understanding the different types of mortgages can also help you get ahead in the process, though you may need to ask questions about many other details. 

These days, you can get a mortgage loan in a very short period of time, so start the approval process early (and save for your down payment and closing costs!) so you can get ready when the time comes. 


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    Ksenia Yudina, CFA, MBA

    Founder and CEO

    Ksenia is the Founder and CEO of U-Nest, the first mobile app that makes it easy for families to save for college. As an entrepreneur and finance professional, Ksenia has focused on alleviating the impact of student debt on families across the economic spectrum. Previously, Ksenia was a Vice President atCapital Group/American Funds, the largest 529 provider in the U.S. In this role, she played a leadership role in helping parents plan and manage their finances, with a focus on the future well-being of their children. Prior to Capital Group/American Funds, she was founder of a residential real estate company. Ksenia earned her bachelor’s degree in finance from CaliforniaState University Northridge, and an MBA from UCLA’s Anderson School of Management.

    Mike Van Kempen

    Chief Operating Officer

    Mike joined U-Nest in September 2019 as COO. He was previously at Acorns, a financial wellness platform, where he spearheaded the analytics and growth initiatives. Mike successfully expandedAcorns’ paid acquisition strategy, adding over 4.5 million investment accounts. Mike began his career in strategy & analytics at Belly, a Chicago-based loyalty startup in 2012. At Belly, Mike led projects that fueled growth across all aspects of the business, growing the customer base from1,000 to over 11,000 merchants, and accumulating a membership of over 2 million customers.Mike holds a B.B.A. in Finance from Loyola University of Chicago.

    Steve Buchanan

    Chief Technology Officer

    Steve has over 20 years of experience in delivering digital innovations in the financial sector. Steve previously orchestrated product architecture and innovation as a Solutions Architect/ Fintech consultant at Union Bank. Prior to Union Bank, he was Chief Architect and Director of Engineering at Calypso, a Silicon Valley startup, where he architected and built multiple financial solutions. He was also Head of Global Integrations at Globe One in Vietnam where he integrated its Peer-to-Peer lending products into core banking solutions. Steve also built the first ever electronic Equities &Equity Options trading systems for Scottish stock brokers Wood Mackenzie (acquired by CountyNatWest). He is a graduate of Edinburgh University.

    Peter Mansfield

    Chief Marketing Officer

    Peter has built an impressive track record in multiple financial industry segments including payments, credit/prepaid cards and lending. He has played an instrumental role at a succession of financial industry leaders, co-founding companies such as Brand3 (acquired by American Express) and PropertyBridge (acquired by Moneygram), and, as the early stage marketing lead at Marqeta (where he was team member number two), BillFloat and WallabyFinancial (acquired by Bankrate).He has helped fast-growth companies reach an aggregate market value of close to $8 billion. Peter holds a bachelor’s degree in economics from the University of Angila, UK.

    Sonya Kidman

    Client Relationship Manager

    Sonya Kidman is a Customer Success professional with a decade of experience in advocating for consumer through user research and genuine empathy. Sonya specializes in user behavior and regularly attends national and global training sessions in wellness and people analytics tools. Sonya is a true global citizen was born in Russia, grew up in Israel, lived and worked in Canada and NewZealand. That global expertise along with an undergraduate degree in Sociology from Tel AvivUniversity have helped to shape a bullet-prof Sonya's framework to develop a winning customer strategy.

    Frank Mastrangelo

    Board Member

    One part banker and one part technologist, Frank spent his early days with the Annenberg Foundation and PNC Bank. His career path led him to Jefferson Bank, where he led the build-out of its electronic banking platforms, and where he would forge a powerful alliance with The Bancorp co-founder Betsy Z. Cohen. As President and COO of The Bancorp from its inception in 1999 Frank played a critical role in helping the organization become an industry bellwether for branchless financial services and a global leader in payments. For this, he has become a widely respected fintech expert, and thought-leader. Frank was recognized in 2013 by Banking Innovation, a leading industry journal, as an “Innovator to Watch.” and as one of the innovators shaping the future of banking. Frank is a graduate of West Chester University of Pennsylvania.