How to Get a Mortgage: A Step-by-Step Guide for First-Time Homebuyers
The Mortgage Timeline (Overview)
Getting a mortgage is a 30–60 day process with distinct stages. Understanding the full picture before you start prevents costly surprises.
| Stage | Timeframe | Key Action |
|---|---|---|
| Preparation | 3–12 months before | Build credit, save down payment |
| Pre-qualification | 1–3 days | Soft check, estimate of loan amount |
| Pre-approval | 1–3 weeks | Hard pull, verified financial review |
| Home search | Varies | Shop with pre-approval letter in hand |
| Application | Under contract | Full loan application submitted |
| Underwriting | 2–4 weeks | Lender verifies everything |
| Closing | Final day | Sign documents, get keys |
What You Need to Qualify
| Loan Type | Min. Credit Score | Min. Down Payment | Best For |
|---|---|---|---|
| Conventional | 620 | 3–20% | Good credit, avoids FHA restrictions |
| FHA Loan | 580 (3.5% down) 500 (10% down) | 3.5% | Lower credit scores, first-time buyers |
| VA Loan | No minimum | 0% | Veterans and active military |
| USDA Loan | 640 | 0% | Rural areas, income limits apply |
The Real Cost of Your Down Payment Choice
On a $350,000 home, here’s what different down payments cost over the life of the loan (30 years, 6.8% rate):
| Down Payment | Amount | Loan Balance | Monthly Payment | PMI/mo | Total Cost |
|---|---|---|---|---|---|
| 3% (FHA) | $10,500 | $339,500 | $2,220 | $170 | $878,500 |
| 10% | $35,000 | $315,000 | $2,060 | $80 | $777,000 |
| 20% | $70,000 | $280,000 | $1,830 | $0 | $728,800 |
The 20% down payment saves $149,700 over 30 years compared to 3% down. But waiting years to save 20% has its own cost — home prices may rise, and you miss years of equity building. There’s no universally right answer.
The Documents You’ll Need
- 2 years of tax returns (W-2s and 1099s)
- 30 days of recent pay stubs
- 2–3 months of bank statements
- ID (driver’s license or passport)
- Social Security number
- Statements for all debt (car loans, student loans, credit cards)
Pro tip: Get pre-approved before you look at homes. Sellers take pre-approved buyers more seriously, and you’ll know exactly what you can afford. Most pre-approvals are valid for 60–90 days. Improve your credit score before applying →
Frequently Asked Questions
Should I use a mortgage broker or go directly to a bank?
Brokers shop your application to multiple lenders simultaneously, often finding better rates. Direct bank relationships can offer loyalty discounts. Best approach: get quotes from both your current bank AND a mortgage broker, then compare.
What is PMI and when does it go away?
Private Mortgage Insurance is required on conventional loans with less than 20% down. It typically costs 0.5–1.5% of the loan annually. Once you reach 20% equity, you can request PMI cancellation; it must be automatically removed at 22% equity by law.
