What Buyers Need to Get a Mortgage and Purchase a Home in 2025: A Complete Step-by-Step Checklist
Buying a home is one of the biggest financial moves you’ll ever make. In 2025, the mortgage process has become more streamlined thanks to digital tools, but the documentation and preparation required remain just as important. Whether you're a first-time homebuyer or purchasing your next property, here's a step-by-step list of what you’ll need to get approved for a mortgage and close on your new home successfully.
1. A Strong Credit Score and History
Lenders rely heavily on your credit report to evaluate your risk as a borrower.
Aim for a credit score of 620 or higher (740+ gets you the best rates)
Review your credit report from all three bureaus: Experian, Equifax, and TransUnion
Dispute any errors or outdated items before applying
Pay down high-interest credit cards to improve your credit utilization ratio
Avoid new credit inquiries or opening accounts during the process
2. Proof of Stable Income
Lenders want to see steady, reliable income over the past 2 years.
Provide W-2s or 1099s for the last two years
Include recent pay stubs (usually covering 30–60 days)
If self-employed, be prepared with two years of tax returns and a profit & loss statement
Gig workers or freelancers may need additional verification of consistent income
3. Verification of Employment (VOE)
Your lender will likely contact your employer to verify your job status and income.
Be sure your employment is stable and you're not planning a job change during the process
Some lenders may require an employment letter in addition to pay stubs
4. Proof of Funds for Down Payment and Closing Costs
You’ll need to prove you have enough saved to cover upfront expenses.
Bank statements (usually 60–90 days) showing available funds
Gift letter if someone is contributing to your down payment
Avoid large unexplained deposits—lenders will want to verify the source
Be prepared to cover closing costs (typically 2–5% of the purchase price) in addition to your down payment
5. Pre-Approval Letter from a Mortgage Lender
Before shopping seriously, get pre-approved to strengthen your buying power.
Shows sellers you’re financially qualified
Helps you understand your maximum budget
Makes your offer more competitive in a hot market
6. Debt-to-Income Ratio (DTI) Below 43%
Your DTI ratio compares your monthly debt obligations to your gross monthly income.
Lenders prefer a DTI of 43% or lower
Reduce existing debts like car loans or student loans if possible
Avoid financing big purchases (cars, furniture, etc.) before or during the mortgage process
7. Government-Issued Photo ID
You’ll need valid identification throughout the process.
Driver’s license or passport
Some lenders may request additional forms of ID if there are discrepancies
8. A Clear Vision of What You Want in a Home
Before touring homes, define your needs and wants.
Location, number of bedrooms, bathrooms, square footage
School zones, commute time, neighborhood type
Be realistic about what fits your approved loan amount and monthly budget
9. A Trusted Real Estate Agent (Hint: Michael Peron)
Working with a knowledgeable Realtor ensures you avoid costly mistakes and navigate the process smoothly.
Helps you negotiate better terms and offers
Provides insights on pricing, location, and property conditions
Guides you through inspection, appraisal, and closing
And if your Realtor is AI-Certified, like Michael Peron, you get an edge with advanced market insights and data-driven home searches
10. Home Inspection and Appraisal Readiness
Lenders require an appraisal to confirm the home’s value. Most buyers also schedule a home inspection to identify any major issues.
Budget ~$300–$600 for inspections and ~$400–$700 for appraisal fees
Be present for the inspection and ask questions
Use findings to negotiate repairs or credits, if needed
11. Homeowners Insurance Policy
Before closing, you’ll need proof of homeowners insurance.
Shop around for the best rates and coverage
Provide the policy to your lender prior to closing
In some areas (like South Florida), you may also need flood or windstorm coverage
12. Patience, Organization, and Communication
The mortgage process involves multiple steps and people—loan officers, underwriters, appraisers, title agents, and Realtors.
Stay organized and respond quickly to document requests
Keep copies of all paperwork
Communicate regularly with your agent and lender to avoid delays
Final Thoughts: Be Prepared, Be Competitive, Be Informed
Buying a home in 2025 is an exciting journey, but preparation is everything. Having your documents ready, understanding lender expectations, and working with an experienced AI-Certified Realtor gives you the upper hand in any market—especially in competitive areas like South Florida.
Need help getting started with a pre-approval or finding your dream home?
Contact Michael Peron, your trusted Certified AI Realtor, to guide you from pre-approval to closing with confidence.
