Not necessarily, but it will certainly help. It is possible to get a conventional mortgage with a FICO credit score as low as 620, and you can obtain a higher-cost FHA mortgage with a score in the 500s. However, be aware that the lower your score, the higher your interest rate will be.

The short answer is that you can get a conventional mortgage with as little as 3% down, an FHA loan with 3.5% down, and a VA or USDA loan with no money down at all. However, with a conventional or FHA loan, you’ll have to pay private mortgage insurance, aka PMI, if your down payment is less than 20% of the home’s sale price. (Those payments won’t be a permanent fixture in your monthly payments, however. Once the loan-to-value ratio on your mortgage falls to 80%, you can ask your lender to drop them. And even without your request, lenders are required to cancel PMI when the loan-to-value ratio drops to 78%.)

When deciding between a fixed-rate and an adjustable-rate mortgage, consider your financial situation and long-term plans. A fixed-rate mortgage offers stability with consistent interest rates and monthly payments, making it ideal for long-term homeowners who value predictability. In contrast, an adjustable-rate mortgage (ARM) starts with lower initial rates and can result in lower initial monthly payments, which can be advantageous if you plan to sell or refinance within a few years. Ultimately, if you value long-term stability, opt for a fixed-rate mortgage; if you anticipate moving or refinancing soon and are comfortable with potential rate changes, an ARM may be the better choice. Consider your financial goals and the duration of your stay in the home to make the best decision.

In general, be prepared to show all of the following:

• Income verification (Last two years’ tax returns, W-2s, 1099s, and your last few pay stubs)
• Drivers’ license and Social Security card (or alternative ID)
• Bank statements
• Proof of funds to close (and an explanation of where they came from, if it’s not obvious)
• If some or all of your down payment is coming from a gift, you will need gift letter from the source of the funds that confirm they are gift, not a loan.

A pre-qualification is a basic review of your finances to determine if you would qualify for a mortgage. In general, a pre-qualification is based on unverified information you provide and does not include a credit check or any documentation, and is therefore not a firm guarantee of a loan.

Unlike a pre-qualification, a pre-approval can be a highly useful tool in the homebuying process. It’s essentially the same thing as applying for a mortgage, just without a specific home attached to it. As part of a pre-approval, a lender will check your credit, verify your income and employment, and commit to lending a certain amount of money. A pre-approval can show sellers that you’re serious about buying a home, and that you’re likely to be able to follow through on a bid, and close on their property.

The term “closing costs” refer to all of the charges you’ll need to pay before your loan is completed. This can include origination fees, (if applicable), title insurance, prepaid escrows, and more. Closing costs can vary significantly, but generally, expect to pay around 2% to 3% of the home’s price in closing costs.