Mortgage Readiness: What You Need to Know Before Applying for a Home Loan

When we talk about mortgage readiness, the state of being financially prepared to qualify for and handle a home loan. Also known as home loan readiness, it’s not just about having enough saved for a down payment—it’s about proving you can handle the long-term responsibility of owning a home. Most people think it’s all about credit score or income, but the real picture is deeper. Lenders don’t just look at your bank balance. They check your debt-to-income ratio, how much of your monthly income goes toward paying off debts like credit cards, car loans, or student loans. If you’re spending 50% of your pay on bills, you won’t qualify—even if you make $100,000 a year.

Then there’s the credit score, a three-digit number that tells lenders how risky you are as a borrower. In the U.S., a score below 620 makes approval tough. In India, banks often look for 750 or higher. But it’s not just the number—it’s the story behind it. Did you miss a payment last year? Did you max out your cards? Did you open five new accounts in six months? Those things hurt more than you think. And no, paying off your balance monthly doesn’t automatically mean your score is perfect. It’s about history, consistency, and time.

Down payments are another big piece. Many think you need 20%—but that’s outdated. In Mumbai, some lenders offer loans with as little as 10% down. But here’s the catch: smaller down payments mean higher monthly payments and private mortgage insurance (PMI), which can add hundreds to your bill. The smarter move? Save a little longer and cut your monthly burden. That’s where mortgage readiness really shines—not just getting approved, but getting approved for something you can actually live with.

And don’t forget hidden costs. Closing fees, property taxes, maintenance, insurance—these aren’t optional. A $50 lakh apartment isn’t just the loan. It’s the stamp duty, the registration, the inspections, the repairs you didn’t see coming. People who skip this part end up stressed, behind on payments, or worse—losing the home. Mortgage readiness means planning for all of it, not just the monthly EMI.

What you’ll find below are real stories and real numbers from people who got it right—and those who didn’t. From how to fix a low credit score in 90 days, to whether you should pay off your car loan before applying, to what income proof actually works for freelancers in India. These aren’t theory pieces. They’re practical, no-fluff guides based on what lenders actually check—and what trips up most first-time buyers in places like Mulund.