How to Get a Mortgage: A Step-by-Step Guide to Homeownership
How to Get a Mortgage: A Step-by-Step Guide to Homeownership
Buying a home can feel like a huge milestone, but for many people, the biggest question is: how do I even get a mortgage? Whether you're buying your first home or starting to plan ahead, understanding how mortgages work will help you avoid stress and make smarter decisions.
Getting a mortgage isn’t just about choosing a house and filling out a form. It's a financial process that involves lenders reviewing your credit, income, debts, and savings to see if you’re ready to borrow such a large amount of money. This guide will walk you through the key steps, help you get prepared, and explain how Cheers Credit Builder can help you strengthen your credit profile along the way.
What is a Mortgage?
A mortgage is a loan from a bank or other lender that helps you buy a home. The lender pays the seller on your behalf, and you agree to repay the money over time, usually with interest, in monthly payments.
Most mortgages last 15 to 30 years. If you stop making payments, the lender has the legal right to take the house back through a process called foreclosure. Due to this risk, lenders are very cautious about who they approve.
Step 1: Know Where You Stand Financially
Before applying, review your financial situation. Lenders will look closely at three things:
- Credit score
- Debt-to-income ratio (DTI)
- Down payment savings
A higher credit score means better loan offers. A lower DTI (your monthly debt divided by your monthly income) shows you’re not overburdened with debt. And a larger down payment shows you’re serious and reduces the lender’s risk.
If your credit score is low or your DTI is too high, you may not qualify—or you might get stuck with high interest rates.
Step 2: Build or Improve Your Credit
Your credit score plays a big role in getting a mortgage. Most lenders prefer a score of at least 620, though some government-backed loans allow lower scores. If you want better rates and a smoother approval process, aim for 700+.
If you’re starting from scratch or recovering from past credit issues, a credit-builder loan can help.
Cheers Credit Builder offers a low-risk way to start improving your score. It’s a small installment loan where your monthly payments are reported to all three major credit bureaus. You don’t need a high score to qualify, and there’s no risk of running into credit card debt. By building up your payment history and credit mix—two factors that affect your score—you can strengthen your profile before applying for a mortgage.
Step 3: Get Pre-Approved
Once your credit and finances look solid, it’s time to get pre-approved. This means a lender takes a close look at your financial documents and gives you a letter showing how much they’re willing to lend.
A pre-approval isn’t a guarantee, but it gives you a budget and makes you look serious to real estate agents and sellers. It’s different from pre-qualification, which is more of an estimate based on self-reported info.
To get pre-approved, you’ll usually need:
- Recent pay stubs or proof of income
- Tax returns from the past two years
- Bank account statements
- ID and Social Security number
- Info on your debts and assets
Step 4: Shop for a Mortgage
Not all loans are the same. Some loans have fixed rates that never change, while others have adjustable rates that can go up or down. Some are backed by the government (like FHA or VA loans), which may have easier requirements.
Compare interest rates, loan terms, and closing costs across different lenders. Even a small difference in rate can save—or cost—you thousands over time.
Step 5: Find a Home and Make an Offer
Once you know how much you can afford, you can start house hunting. When you find a home you like, your agent will help you make a formal offer. If the seller agrees, you’ll sign a purchase agreement and start the mortgage approval process in full.
During this stage, the lender will order an appraisal to make sure the home is worth the loan amount. They may also request additional documents or recheck your credit before final approval.
Step 6: Close on Your Home
If everything checks out, you’ll go to closing—where you sign final paperwork, pay your closing costs, and officially become a homeowner. After that, your regular mortgage payments begin.
Conclusion
Getting a mortgage takes time and planning, but it’s possible—even if you’re just starting to build credit. Begin by understanding your credit score and working to improve your credit profile.
Cheers Credit Builder makes that first step easier. It’s designed to help you show lenders that you’re reliable, responsible, and ready to take on long-term borrowing. Whether your goal is homeownership next year or further down the road, building credit today puts you in a stronger position.
References:
https://www.usbank.com/home-loans/mortgage/first-time-home-buyers/credit-score-for-mortgage.html
https://www.rocketmortgage.com/learn/how-to-get-a-mortgage
https://www.bankrate.com/real-estate/what-credit-score-do-you-need-to-buy-a-house/
https://www.nerdwallet.com/article/mortgages/how-to-apply-for-a-mortgage
