Steps to Take Before Applying for a Mortgage

  • The Mortgage Warrior

Categories: Bad Credit Mortgages Bank Mortgages Best Mortgage Rates

Blog by The Mortgage Warrior

Embarking on the journey of buying a home is exciting, but it’s also dotted with decisions that can affect your financial health for years. One of the most pivotal is securing a mortgage. At The Mortgage Warrior, we are committed to equipping you with all the tools and knowledge you need to navigate this process confidently. Before you dive into applications and open houses, you should take several critical steps to ensure you're fully prepared. Here's a step-by-step guide to make your mortgage application process as smooth and successful as possible.


1. Check Your Credit Score

Your credit score is one of the critical factors lenders consider when determining your eligibility for a mortgage. It influences the interest rate you'll be offered and, in some cases, the amount you can borrow. Obtain a copy of your credit report from major credit bureaus—Equifax, Experian, and TransUnion—and ensure all the information is accurate. If your score isn’t where you’d like it to be, improve it by paying down existing debt, making all future payments on time, and avoiding new credit inquiries, which can temporarily lower your score. 

2. Calculate What You Can Afford

Before looking at properties, determine how much home you can realistically afford. Consider your income, debt, monthly expenses, and future financial goals. A common rule of thumb is that your monthly home payment should not exceed 28% of your gross monthly income, and total debt payments shouldn't exceed 36%. Use online mortgage calculators to estimate your monthly payments, including taxes, homeowner’s insurance, and potentially homeowners association (HOA) fees.

3. Save for a Down Payment

You will most need a down payment to purchase a home. The amount can vary significantly depending on the type of mortgage you choose. Conventional loans typically require between 5% and 20% of the home's purchase price, while government-backed loans (like FHA loans) can require as little as 3.5%. Saving more can reduce your borrowing amount and monthly payments and potentially eliminate the need for private mortgage insurance (PMI).

4. Gather Financial Documents

When you apply for a mortgage, you must provide various financial documents. Start gathering these as early as possible to speed up the application process. Commonly required documents include:

  • Recent pay stubs

  • Federal tax returns from the past two years

  • W-2s and 1099s from the past two years

  • Bank statements from the past few months

  • Documentation of other assets (like investments)

  • Credit report

  • Proof of identity (such as a driver’s license or passport)

5. Understand Different Mortgage Options

Multiple types of mortgages are available, each with advantages and disadvantages. Research the most common types, such as fixed-rate, adjustable-rate, FHA, VA, and USDA loans. Consider how long you plan to stay in the home, your current financial situation, and prospects. For personalized advice, consult a mortgage advisor who can explain the nuances of each option and help you find the best fit. 

6. Get Pre-approved for a Mortgage

Mortgage pre-approval is when a lender evaluates your financial background (income, debt, assets, credit score) and determines how much they will lend you. Getting pre-approved is beneficial because it gives you a more transparent budget for house-hunting and shows sellers that you’re a serious buyer, which can be a crucial advantage in competitive markets.

7. Budget for Additional Costs

Purchasing a home involves more than just the sale price. Be sure to budget for additional costs, such as:

  • Closing costs (typically 2% to 5% of the home’s purchase price)

  • Home inspections

  • Appraisals

  • Moving expenses

  • Immediate home repairs and necessities

8. Consider the Timing

The right time to apply for a mortgage can depend on various factors, including market conditions, interest rates, and your personal financial situation. Keep an eye on how the market is trending and consult a financial advisor to choose the best time to move.

9. Choose the Right Lender

Not all lenders are created equal. Research various lenders, including large banks, credit unions, and online lenders. Compare their rates, fees, customer service, and reviews. Choosing a lender that you trust and who offers competitive rates and terms can make a big difference in your overall satisfaction and financial stability.


Applying for a mortgage can be daunting, but taking these steps before diving in can significantly increase your chances of success and financial security. At The Mortgage Warrior, we’re here to guide you through every step of your mortgage journey. Contact us today to discuss your options, and let us help you prepare to take this significant step toward homeownership.

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