5 Key Steps to Secure Home Mortgage Loan Approval – A Guide by

Navigating the labyrinth of home mortgage loan approval can often feel like a daunting task. It’s a complex process, filled with terms and conditions that might seem like they’re designed to confuse. With the right guidance and a few savvy tips, you’ll be well on your way to securing that all-important approval. Whether you’re a first-time buyer or an experienced homeowner looking for a change, this article will provide the essential tips you need.

5 Tips for a Home Mortgage Loan Approval

Tip 1: Strengthen Your Credit Score

A strong credit score substantially increases your chances of getting a home mortgage loan approved. Lenders use credit scores to assess your creditworthiness. They consider scores of 700 or above as favorable.


 To boost your credit score, pay off outstanding debts, keep credit card balances low, and avoid new credit applications during the loan approval process.

Strategies to Boost Your Credit Score

Elevating your credit score isn’t an overnight process; it takes time and intentional efforts. Here are some strategies that can help:

  1. Make Timely Payments: Punctuality in paying bills and debts contributes significantly to a higher credit score, given payment history impacts 35% of a person’s credit score.
  2. Reduce Debt: Lowering the amount owed decreases your debt-to-income ratio, a key factor mortgage lenders consider. You’ll want to focus on paying down high-interest debts first, like credit cards.
  3. Avoid New Debt: Refrain from making big purchases or opening new credit cards in the months leading up to the mortgage application.
  4. Monitor Credit Reports: Regularly review credit reports for errors or discrepancies. If one found, promptly resolve it with the credit bureau.
  5. Keep Old Credit Cards Open: Even if they’re not frequently used, old credit cards contribute to a longer credit history, which can benefit your score.

Tip 2: Maintain a Low Debt-to-Income Ratio

The debt-to-income ratio represents the percentage of your income that goes into paying debts. Most lenders prefer a debt-to-income ratio of 36% or less. Paying off debts and avoiding new ones can assist you in achieving a lower ratio.

Ways to Decrease Your Debts

Curbing debts and improving the debt-to-income ratio isn’t impossible. Here are some guiding principles:

  1. Evaluate Debts Regularly: Keeping an eye on the debts helps anticipate problems that could hurt the chances of securing a home mortgage loan.
  2. Plan Prioritization: High-interest loans or those which are nearing their due date should be paid off first.
  3. Create a Budget: A prudent budget helps control expenditures and funnels money towards debt clearance.
  4. Make Extra Payments: Paying more than the minimum due amount reduces the overall balance and aids in early debt closure.
  5. Avoid New Debt: Uptaking new credits while trying to pay off existing debts prolongs the debt cycle, complicating the loan approval process.


Remember, a strong control over debt ensures a smoother loan approval process, moving a step closer towards owning the dream home. The 5 tips for a home mortgage loan approval advocacy for the same as the third significant tip for securing a home mortgage loan.

Tip 3: Save for a Down Payment

The down payment amount affects the chances of getting the loan approved. A high down payment reflects higher financial stability. It typically ranges from 3% to 20% of the loan amount but saving more than the minimum requirement can increase the odds of approval.

Why a Large Down Payment is Beneficial

Securing a home mortgage loan is typically smoother with a larger down payment. It reduces the loan amount, therefore decreasing the debt-to-income ratio — a significant factor in the loan approval process. By lowering the amount to be borrowed, borrowers increase their chance of an approved mortgage, improving their position in the eyes of lenders. A sizeable down payment often translates into lower monthly payments, making debt management easier during the course of the mortgage.


Moreover, prospective borrowers who back their loan with a substantial down payment are less likely to fall into financial hardship, thus providing additional assurance to the lender.

Tip 4: Steady Employment History

Lenders find an applicant with a steady employment history more reliable. Two years of consistent work history, preferably with the same employer, helps in assurance of continuous income, which is a positive sign for loan approval.

Tip 5: Get Pre-Approved

Mortgage pre-approval, a lender’s offer to loan you a certain amount under specific terms, can make you an attractive buyer. It streamlines the loan process and gives you a clearer understanding of how much house you can afford.