It seems as though it’s getting harder and harder to get a mortgage in 2023, what with interest rates rapidly on the rise, and banks not willing to lend money to just anyone. But even if you’re a first-time homeowner, and you have your financial house in order, it’s still possible to get a good deal on a mortgage, despite the rough financial circumstances currently facing the nation.

Says the experts at Option Funding Inc., you have a better chance of acquiring your first ever home mortgage if all your existing credit accounts, along with your bills, are being paid on time during the loan application process.

You should pay off your credit card and line-of-credit balances to 30 percent of their available credit. Also, it’s best to keep all your financial records in good order. Finally, don’t change employers while applying for your mortgage, and make sure to keep your income consistent.

How much of a mortgage can you qualify for? If you live on the West Cast, for example, you can use this California mortgage calculator to get a good idea of what you can and can’t afford.

But what are some other steps you can take to make certain you qualify for a mortgage in 2023? According to a new report by The Motley Fool’s, The Ascent, for first-time homebuyers, finding a property you’d love to purchase is just the first step.

You must also navigate the turbulent waters of applying for your first mortgage. It’s a process that can be more complicated than you might have imagined. A home mortgage is said to be a major financial commitment. Make it a priority to get not only the best loan possible, but also the most affordable.

Here are some tips for qualifying for your first mortgage in 2023.

Down Payment

Some first-time home buyers assume you need a large down payment to qualify for a mortgage. But, as it turns out, you might not require as large a down payment as you think. It’s natural for first-time buyers who haven’t yet acquired a mortgage to believe they need to put a lot of cash upfront on their first home. But this isn’t always the case.

According to the National Association of Realtors, the average down payment for a first-time home buyer can be as low as 6 percent or 7 percent in 2023. However, the ideal down payment for a first-time home purchase is around 20 percent of the asking price. After all, the more money you put down on your first home, the better your mortgage rate will be. You will also avoid having to pay a PMI, or private mortgage insurance.

What’s PMI? It’s an insurance policy engineered to protect mortgage lenders in the case of foreclosure. It ensures the lender won’t sustain any “out-of-pocket losses” if the homebuyer doesn’t pay the monthly mortgage. The homebuyer is responsible for paying the PMI which can run any where from 1 to 1.5 percent of the home’s sale price.

Your Debt and Credit Impacts How Much You Borrow

Says The Motely Fool, when you begin to explore your options for getting a mortgage, you need to be cognizant of your overall credit score along with the amount of debt you have already taken on. This will affect the amount you can borrow along with the rate the bank or private lending company offers you.

Most lenders are looking for a credit score that’s in the mid-to-high 600s if you wish to qualify for a conventional loan. Scores above 700 are said to be optimal. When considering your debt, you should keep your housing costs below 28 percent of your income.

Total debt payments, including your new monthly mortgage, should be below 36 percent. You might find a lender who will allow approve your mortgage if your payments exceed these debt-to-income ratios, but you won’t get the best rate.

What’s important is that you get yourself into excellent financial shape prior to applying for your first mortgage.

Avoid Major Life Changes Prior to Applying for Your First Mortgage

It’s important for mortgage lenders to know the amount of debt you have already incurred is stable and being paid on time. They also need to know that your income is stable. Therefore, it’s of paramount importance that you don’t make any major changes to your employment or financial situation prior to applying for your first mortgage in 2023.

But if you have recently switched jobs and your income has increased because of it, you might want to wait another year or two while you develop a solid employment history before you attempt to apply for your first home loan.

Purchasing a first home is still one of the best financial investments you can make. But make certain your financial house is already in order before you apply for your first home mortgage.