What you'll learn ✅
- How difficult it is to qualify for a mortgage in today’s lending environment
- The minimum credit score, down payment, and debt-to-income (DTI) requirements for major loan types
- Step-by-step what the mortgage approval process actually involves
- Practical ways to improve your approval odds before you apply
Around 4 in 5 home buyers secure mortgages to finance their home purchases. But that doesn’t necessarily mean that getting approved for a home loan is a sure thing. In fact, experts say it’s more difficult to qualify for a mortgage loan today versus years ago.
How hard is it to get a home loan today, you wonder? What do you need to get a home loan when it comes to minimum requirements? And what are some of the best ways to get a home loan? This guide will walk you through what to expect, what you need to be eligible, and the steps involved with getting a mortgage loan.
How hard is it to get a mortgage?
Truth is, obtaining a mortgage loan today is more challenging than it was in the past when rates were lower and lender rules were less stringent.
“After the housing crash of 2008 and the fallout that followed, lending institutions significantly tightened their underwriting standards,” says Michael Archbold, an associate broker and Realtor with RE/MAX Results in Fort Wayne, Indiana. “In today’s mortgage environment, buyers are required to show stable, verifiable employment, typically with at least several months of income consistency – along with one or two years of tax returns. Credit standards are also much stricter.”
Tyler Vaughan, a realtor in Flagstaff, Arizona, agrees that mortgage approval is tougher nowadays because jobs and income don’t always match up with the way lenders typically assess risk.
“More people are switching into freelancing and gig work, others switch companies quickly, and many borrowers piece together income from multiple roles. These kinds of income can be real and steady, but most lenders' mortgage requirements are set up to approve borrowers who show consistent pay from one employer over time,” Vaughan adds.
Additionally, consider that affordability is tighter, due to the combination of higher mortgage rates, increasing home prices, and overall inflation. Many prospective purchasers find it difficult to save up enough for the down payment, have sufficient cash reserves, and prove they can cover their monthly mortgage payments.
>Nearly 8 out of 10 people who apply for a loan with Better get approved.¹
Mortgage loan requirements
Here’s a breakdown of what you’ll need to be eligible for the four most common mortgage loan programs:
| Loan type | Minimum credit score | Minimum down payment | Maximum DTI ratio | Mortgage insurance or fees |
|---|---|---|---|---|
| Conventional | Often 620+ | 3%–5% | Around 43% (varies) | Private mortgage insurance (PMI) required if down payment <20% |
| FHA | 500–579 (10% down) 580+ (3.5% down) |
3.5% or 10% | 43% (can be higher) | Mortgage insurance premium (MIP) required |
| VA | No official minimum (lenders often prefer 620+) | 0% | 41% guideline (flexible) | One-time funding fee; no monthly mortgage insurance |
| USDA | Typically 640+ | 0% | 41% (flexible) | Upfront guarantee fee and annual fee |
Conventional loans
Conventional mortgage loans that conform to Fannie Mae and Freddie Mac standards may require as little as 3% upfront. However, putting down at least 20% lets you sidestep private mortgage insurance (PMI).
“Conventional loans are typically made based on your creditworthiness and the ability to prove you have enough income,” explains Dennis Shirshikov, a professor of economics and finance at City University of New York/Queens College. “In addition to consistent work history, lenders also value sufficient financial reserves to prove that you can afford unexpected payment shocks.”
Most lenders look for a minimum credit score of 620, while borrowers with scores of 740 or above typically qualify for more competitive interest rates and reduced fees. Debt-to-income ratios are usually limited to 43%, though exceptions may be made for applicants with especially strong credit profiles.
FHA loans
FHA loans, which are insured by the federal government, allow buyers to put down just 3.5% with a credit score of 580 or higher – or 10% down with scores as low as 500. They’re often a strong fit for first-time purchasers or borrowers with limited savings or less-than-perfect credit.
“FHA loans are intended to be more readily available, with less stringent down payment and credit requirements,” continues Shirshikov.
Keep in mind, though, that FHA financing requires mortgage insurance premiums, typically for the entire loan term unless you later refinance into a conventional mortgage after building sufficient equity. Borrowers may qualify with debt-to-income ratios up to 50% if they have offsetting strengths, and the home must satisfy HUD’s minimum property standards for safety and condition.
VA loans
One of the most generous mortgage options available is a VA home loan, restricted to eligible veterans, active-duty service members, and certain surviving spouses. Similar to USDA financing, VA loans typically require no down payment and don’t include monthly mortgage insurance, and they often come with comparatively low interest rates.
“There is no VA set minimum credit score, but lenders still apply their own standards. Most look for a credit score of at least 620 and prefer a debt-to-income ratio of 41% or less,” Vaughan points out.
Most VA loan borrowers also pay a one-time VA funding fee – calculated based on factors such as service history and down payment amount – although some veterans may be exempt from this charge.
USDA loans
Another zero-down financing route is a USDA home loan, available for properties located in eligible rural and certain suburban communities. In most cases, lenders look for a debt-to-income ratio of 41% or lower, and a credit score of 640 or higher can help streamline approval.
Borrowers must also meet income guidelines, earning no more than 115% of the area’s median household income. While USDA loans don’t charge traditional mortgage insurance, they do require an upfront guarantee fee and an ongoing annual fee, both of which are rolled into the overall cost of the mortgage to safeguard the lender.
“But be aware that USDA loans come with specific property and use restrictions. For example, you may be disqualified if you plan to operate a farm business on the property,” Archbold says.
How to get a mortgage
Eager to pursue a home loan? Take the time to better understand what’s involved. Here are the common steps required.
Check your credit and strengthen your finances
Before applying for a mortgage, review your credit score and three free credit reports; if you notice any errors or inaccuracies, dispute them. Also, take a close look at your earnings, savings, and existing debts. Pay down any high credit balances, avoid taking on new debt, and build up savings for your down payment and closing expenses. Remember that a healthier financial profile improves your approval odds and may qualify you for better rates.
Set a practical homebuying budget
It’s smart to carefully determine what price range truly fits your finances. Lenders use income and debt benchmarks to calculate how much you can borrow, but you should also give thought to a monthly payment that feels comfortable.
Account for principal, interest, property taxes, homeowners insurance, and potential mortgage insurance. Planning conservatively leaves room for maintenance, utilities, and unexpected costs.
Compare available loan programs
Explore different mortgage programs to find the right fit. Fixed-rate loans provide stable payments over time, while adjustable-rate loans may offer lower initial rates that later fluctuate. Conventional loans usually require stronger credit, while FHA loans allow more flexible qualifications, and VA and USDA loans may offer zero-down options for eligible borrowers.
“It’s important to select the most appropriate mortgage product based on factors like your credit score, down payment savings, and long-term affordability,” suggests Archbold.
Get quotes from multiple lenders
To get the most value from your mortgage, compare lenders — but make sure you’re comparing them the right way. Rates, fees, and service models can vary significantly, and even a small difference in interest rate can meaningfully impact your total cost over time.
At Better, you can see transparent pricing and explore your options instantly online. Betsy, Better's AI assistant, evaluates 21,600 loan scenarios to help find your best rate.²
That means you’re not just getting a single quote — you’re seeing a wide range of combinations across loan terms, investors, and rate assumptions, tailored to your financial profile. Once you’re under contract, locking your rate can help protect you from market swings while your loan moves through underwriting.
Simple, transparent, and built to move at your pace.
Get preapproved for a mortgage
It’s worth it to get preapproved for a mortgage before making offers on homes. This requires submitting documentation such as recent tax returns, pay stubs, bank statements, and authorization for a credit check. You’ll receive a preapproval letter, which demonstrates to sellers that your finances have been verified and that you’re prepared to move forward with financing.
“Preapproval is critical because it prevents you from wasting time looking at properties you may not qualify for or realistically afford,” says Archbold.
Choose a home and negotiate terms
Guided by your real estate agent, begin touring properties for sale within your approved price range and preferred location. When you find the right one, submit a written offer outlining your price and conditions.
Most agreements include contingencies for financing, appraisal, inspection, and clear title.
Prepare to provide earnest money as a good-faith deposit toward the purchase.
Finalize your loan and undergo review
Once your offer is accepted, you’ll complete the full mortgage application process. Your lender will verify your financial information, confirm employment, re-review your credit if necessary, and order a professional appraisal. A title company will check for liens or legal claims against the property. During underwriting, you may need to supply additional documents before receiving final approval.
“Once you are under contract, underwriting will review your file, order an appraisal, and send back conditions,” Vaughan notes.
Close and complete the transaction
Prior to your scheduled closing day, review your closing disclosure, which details your final loan terms and total costs. Perform a last walk-through of the home to ensure it’s in agreed-upon condition. At closing, you’ll sign the required legal documents, submit your funds, and the lender will release the mortgage proceeds. Once recorded, the property officially becomes yours.
Be a responsible borrower
After closing, expect your mortgage payments to likely begin the following month. Consider opting for automatic payments and escrow accounts to manage insurance and taxes. Over time, ponder refinancing your loan if desired, eliminating mortgage insurance once you’ve built sufficient equity, and/or making extra payments to reduce interest costs.
The bottom line
Securing a mortgage loan is trickier today than it was years ago. But with the right preparation and financial discipline, and backed by the right resources like a trusted lender and valued real estate agent, you can up your chances of getting approved and purchasing a home you can afford. Be sure to ask your lender questions about anything you don’t understand as you progress through the financing process. And consider choosing Better.com – we offer a variety of loan programs at rates that are, on average, lower than the national average.³
>Nearly 8 out of 10 people who apply for a loan with Better get approved.¹
¹ Based on Better Mortgage internal analysis of 2025 HMDA-reported mortgage application data. The approval rate reflects applications received between January 1, 2025 and December 31, 2025 that were considered “completed,” meaning applications not withdrawn by the applicant or closed for incompleteness. Approval includes applications that were approved but not accepted, loans that ultimately originated, and loans that were approved and later purchased. Results are based on aggregate data and do not guarantee approval for any individual applicant. Approval outcomes depend on a variety of factors, including credit profile, income, assets, property details, and underwriting requirements. Individual results may vary.
² Betsy evaluates loan scenarios using currently available data across participating investors, product types, loan terms, and rate assumptions. The stated number of scenarios reflects a mathematical combination of these inputs (including multiple investors, product categories, loan terms, and rate variations) and does not represent a guarantee that all scenarios are available to every borrower or that any specific rate or loan will be offered. Actual loan options, rates, and terms depend on individual borrower qualifications, credit profile, property characteristics, loan amount, market conditions, and lender requirements at the time of application.
³ Based on a comparison of average note rates. Better Mortgage’s average rate of 6.56% reflects the mean note rate for all funded 30-year fixed-rate mortgage loans originated by Better Mortgage Corporation between January 1, 2025 and December 31, 2025, calculated using internal loan data. The national average rate of 6.66% is based on Bankrate’s published 2025 annual average U.S. 30-year fixed mortgage rate, derived from nationwide lender survey data. Comparison is for informational purposes only and does not represent an advertised rate or guarantee of savings. Individual rates may vary based on market conditions, credit profile, loan characteristics, and other factors. Source: Bankrate historical mortgage rate data.