Home Loans: What You Need to Know to Get Approved [10 Item Checklist]

If you want to know how to get approved for a home loan, you've come to the right place. According to the National Association of Realtors® 2021 Home Buyer and Seller Generations Report, 87 percent of recent buyers and 97 percent of buyers 40 years old or younger financed their home purchase. With the majority of homeowners requiring a mortgage to purchase their dream home, it’s time to dive deep into what it takes to get your home loan approved.

Home Loans Should Not Intimidate You - Here's How to Get Approved

Although there are some steps involved, getting approved for your home loan quickly is possible! Working with the right lender and starting your research early will help you get that much closer to getting pre-approved for the mortgage you need for the home of your dreams. Follow these simple steps to get started.

1. Save Up Some Money for a Down Payment on Your Home Loan.

Over the past year, according to the Mortgage Reports, the average down payment on a house or condo was just 12 percent. For home buyers under the age of 30, home loans averaged a down payment of just 6 percent. Traditionally, 20 percent down payments were the popular perception. Although a down payment of that size will substantially reduce the loan's overall cost, certain government programs and first-time home buyer programs offer lower down payment requirements.

2. Home Loans Require Paperwork. Start Gathering it Now.  

Self-employed borrowers and independent contractors may need their personal and business tax returns along with their 1099-MISC forms when applicable. If you work for an employer, you should find your W-2 forms, paycheck stubs, and a document indicating when the company hired you. You will likely need two years of documentation for any home loan application, so taking some time now to find everything is a good idea.

3. Find a Mortgage Lender Who Offers Desirable Mortgages Before You Start Your Home Search.

Rather than just comparing mortgage rates, remember to consider factors like customer service, convenience, flexibility, and familiarity. You will also want to find a lender who is familiar with your market and can provide you with a mortgage pre-approval letter so that your real estate agent and any possible sellers you will work with will know you mean business when you make an offer to buy a house. Finally, be sure you review what mortgage programs are available. Some local lenders offer specialized mortgages that can help first-time home buyers or other niche groups searching for a home.

4. Ask the Lender to Pre-Approve You for a Mortgage.

Pre-approval is as close as you can get to confirming your creditworthiness without having a purchase contract in place. You will be required to complete a mortgage application and the lender will verify the information you provide. They’ll also perform a credit check. If you’re pre-approved, you’ll receive a pre-approval letter, which is an offer (but not a commitment) to lend you a specific amount, good for 90 days. Lenders take a detailed look at your finances when granting pre-approval. 

Getting pre-approved is a smart step to take when you are ready to put in an offer on a home. It shows sellers that you’re a serious homebuyer and that you can secure a mortgage – which makes it more likely that you’ll complete your purchase of the home.

5. Request a Free Credit Report and Review it Carefully. 

This will help you identify ways to boost your credit score and the likelihood of approval. For example, you may discover errors that negatively impact your credit score which you should report to a credit bureau. Make sure you clean up your credit several months before beginning your home loan application to give the errors time to be removed from your credit report.

6. Find a Real Estate Agent Who Specializes in Your Preferred Neighborhood.

Finding the right real estate agent can make all the difference when you're eyeing a specific neighborhood. You want someone who's not just familiar with the area but totally in the loop about everything from market trends to the coolest local spots. They’ll help you find those hidden gems, snag a great deal, and give you tips that only locals know. With an agent who knows your preferred neighborhood inside and out, your property hunt becomes not just easier, but way more exciting. They’ve got the inside scoop and are ready to guide you every step of the way, making sure you feel confident and informed as you make your move.

7. Look Online as You Search for Possible New Homes.

Browse real estate listings and find an appealing house that you can afford to buy, maintain and insure. Make a reasonable offer on the property. Sellers readily accept offers when they know that reputable lenders have prequalified buyers for mortgages.

Discover your maximum house-hunting budget with our free guide:
How Much House Can I Afford in Oregon?

8. Be Patient, Buying a Home Requires Time.

The underwriting process can take some time. It includes the underwriting team accessing your mortgage application and supporting documentation along with an appraiser accessing the property. It may take a few weeks. To expedite this process, be sure you have completed all the required documents and included all the paperwork required. In the meantime, avoid spending money with credit and put off any plans to apply for other loans or credit cards.

9. Don’t Get Caught Up in the Excitement and Overpay for Your New Home.

If an owner accepts the offer, the homebuying contract goes into effect and your lender can approve the purchase. This decision largely depends on the results of an appraisal. It's crucial to select a home that's truly worth more than the amount you need to borrow.

10. Appraisals Don’t Have to Be the Final Word on Your Home Loan.

If the appraisal prevents a mortgage approval and the estimated value doesn't seem realistic, you can request an appraisal rebuttal. Otherwise, you're probably ready to schedule a closing and start planning to move into your new home. Congratulations!

Your Local Lender Offers Home Loans

CCCU’s Mortgage Team can help you through the seemingly complicated home-buying process. Our local experts are familiar with the community and the people who play a part in a quick closing on your new home. CCCU’s experienced Mortgage Team can lend in any state and are available to assist on evenings and weekends - they're with you every step of the way!

Our FHA Loan, Conventional Mortgages and other products are sure to offer the features you need as you search for an affordable mortgage. Get pre-approved today, so you can start shopping for the home of your dreams.


For more tips on home loans and finding the right home and mortgage for your budget, download our "How Much House Can I Afford in Oregon?" guide.