Annelis Ortiz

Resource · Before You Decide

10-step checklist before applying for a mortgage.

Read it in order, check off what you already have, and work on what's missing. The same framework I use with every client before they fill out a single application.

  1. 01
    Step

    Pull your credit report 90–180 days before applying

    Why it matters

    Most denials I see aren't about income — they're about last-minute surprises: forgotten collections, errors on file, or credit card utilization spiking unexpectedly. Get ahead of it.

    Concrete action

    • Get your free reports at annualcreditreport.com — all three bureaus
    • Dispute any errors directly with the bureau
    • Lower card utilization below 30% of the limit
    • Do NOT close old cards — account age matters

    Common mistake

    Starting the house hunt before checking the report. If credit kills the application after you find the property, you wasted time and momentum.

  2. 02
    Step

    Know your real DTI before falling in love with a house

    Why it matters

    The lender does not look at take-home pay — they look at Debt-to-Income ratio: ALL your monthly debts (cards, car, student loans) plus the proposed house payment, divided by gross income. Conventional accepts ~45-50%, FHA can go higher.

    Concrete action

    • Add up minimum monthly payments on all debt
    • Calculate gross monthly income (pre-tax)
    • Max house payment = (Gross income × 0.45) − current debts
    • If the number scares you, pay highest-interest debt first

    Common mistake

    Calculating off your take-home — that gives an unrealistic number. The bank uses gross.

  3. 03
    Step

    Document EVERY dollar of income in a lendable way

    Why it matters

    W-2 employees: 30 days of paystubs + 2 years of W-2s. Self-employed: 2 years of complete tax returns with all schedules. If you have side hustle or unreported cash income, that income does NOT qualify for the mortgage — critical for many Hispanic families.

    Concrete action

    • W-2: have recent paystubs + 2 years of W-2s organized
    • Self-employed/1099: 2 years of complete tax returns
    • Rental income: 2 years on Schedule E + active leases
    • Consider formalizing the side hustle 24 months before applying

    Common mistake

    Thinking "I make $7,000 a month" when only $4,500 shows on tax returns. To the bank, only documented income counts.

  4. 04
    Step

    Do not open or close anything in the 6 months before

    Why it matters

    Every new account temporarily drops your score 5-20 points. Every closed account changes your utilization ratio. And the bank pulls credit 24-48h before closing — any change can kill the approval.

    Concrete action

    • Do NOT open new cards (not the Apple Watch one, not the store one)
    • Do NOT close old cards you no longer use
    • Do NOT finance a car
    • Do NOT co-sign anything for anyone

    Common mistake

    Financing furniture 'for when you move into your new house'. That debt kills your DTI right before closing.

  5. 05
    Step

    Pre-approval is NOT the same as pre-qualification

    Why it matters

    Pre-qualification is a 10-minute conversation where the originator estimates how much you might qualify for based on what YOU say. Pre-approval means the originator pulled credit and reviewed documented income and debts. Serious sellers only accept the second.

    Concrete action

    • Ask specifically for pre-approval, not pre-qualification
    • Make sure it includes a credit pull (not soft check)
    • Receive a letter with loan amount, estimated rate and terms
    • The letter expires in 60-90 days — renew if the search drags

    Common mistake

    Showing up at an open house with a verbal pre-qualification. The seller's agent notices immediately.

  6. 06
    Step

    Compare at least 3 lenders

    Why it matters

    For the same property, rate difference between two lenders can be 0.25-0.5% — that means thousands in closing costs plus thousands more in interest over the life of the loan. And no, comparing lenders does NOT tank your credit if done within a 14-day window.

    Concrete action

    • Request a Loan Estimate (official document) from 3 different lenders
    • Compare: rate, APR, closing costs, MIP/PMI
    • Ask about lender credits that reduce closing costs
    • Not just big banks — brokers (like me) access wholesale rates

    Common mistake

    Sticking with the first lender out of "loyalty" without comparing. That loyalty can cost you $30K in interest.

  7. 07
    Step

    Calculate your full PITI, not just the house price

    Why it matters

    The sticker price is only part of it. The real monthly payment includes PITI: Principal, Interest, Taxes (property taxes), Insurance (homeowners) — plus HOA and PMI sometimes. A $300K house can have PITI of $1,800 or $2,400 depending on location.

    Concrete action

    • Add: mortgage payment + annual taxes/12 + insurance/12
    • Add HOA if applicable ($100-$500/month)
    • Add PMI if down payment < 20% on conventional
    • Confirm your full PITI fits your budget without squeezing daily life

    Common mistake

    Calculating only principal + interest and forgetting taxes/insurance. The surprise can be $500/month.

  8. 08
    Step

    Know the right program for YOUR profile

    Why it matters

    There is no single program that fits everyone. The options change the barrier dramatically: FHA allows 3.5% with score 580+, Conventional First-Time Buyer allows 3%, VA is 0% for veterans, and state Down Payment Assistance programs can cover most of the down + closing.

    Concrete action

    • Credit 580-700 with little down: explore FHA
    • Credit 700+ and at least 3% down: conventional First-Time Buyer
    • Veteran or active service: VA loan (zero down)
    • Ask about state DPA programs — many are not advertised

    Common mistake

    Assuming you need 20% down because "that's how it always was". That is not true in 2026.

  9. 09
    Step

    Do not move large amounts of money without documenting

    Why it matters

    The underwriter reviews 60 days of complete bank statements. Any deposit that is not from your paycheck needs documented explanation and "seasoning" (time in the account). Receiving $5K from family the week before closing can kill everything without proper documentation.

    Concrete action

    • For gift funds: ask the donor for a "gift letter" from day one
    • For sales: keep receipt + bank statement from the buyer
    • Do not transfer between accounts without a clear paper trail
    • Do not deposit large cash — the bank flags it as "unsourced"

    Common mistake

    Thinking "it is my money, they should not ask me". The bank DOES ask — and without documentation, no approval.

  10. 10
    Step

    Have a post-close cushion of 3-6 months of PITI

    Why it matters

    The day you get the keys, thousands go to moving, appliances, utility deposits, inspector fixes you postponed. Families closing without a cushion spend the first 6 months in anxiety. Families with 3-6 months of PITI saved in reserve do not.

    Concrete action

    • Save 3-6 months of full PITI in a liquid account
    • Keep your personal emergency fund SEPARATE from the house cushion
    • Do not use the cushion for discretionary spending the first year
    • Replace any amount you use within 90 days

    Common mistake

    Spending all savings on down payment + closing with no reserve left. A broken water heater in month 4 pushes you to credit cards.

When you are ready

Let's talk about your specific situation.

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