Make These Moves Today to Qualify for a Mortgage in 2022

A person types on a laptop while sitting on the couch at home.

Image source: Getty Images

Many or all of the products here are from our partners that compensate us. It’s how we make money. But our editorial integrity ensures our experts’ opinions aren’t influenced by compensation. Terms may apply to offers listed on this page.

Looking to buy a home next year? Here's how to set yourself up for a mortgage.

Key points

  • Mortgage lenders can be picky in who they approve for a home loan.
  • If you want to buy a home in 2022, it's worth checking your credit report and score, paying off debt, and taking on extra work before 2021 comes to an end.

It's fair to say 2021 has been a difficult year to buy a home. Though mortgage rates have been nice and low, limited inventory has made finding homes a challenge. Plus, sky-high prices have priced out buyers who are on tight budgets.

Things could improve in 2022, though. We could see an uptick in home listings as more sellers move past their economic fears and gear up to make changes to their living situations. Once more real estate inventory arrives, home prices could start to come down. It's not a bad idea to think about buying a home next year if you've been unsuccessful this year.

But if you're going to buy a home in 2022, you'll probably need a mortgage to finance it. And so it pays to make these moves to increase your chances of not only getting approved, but snagging a great interest rate in the process.

1. Check your credit report and score

Your credit report will give you a snapshot of your various loans and credit card accounts, as well as your payment history and utilization of your existing credit. Ironically, it won't give you access to your credit score. To find out your credit score, you'll need to either pay for it or see if it's available through your bank or credit card company.

Either way, it's important to review both of those items carefully. It takes a minimum credit score of 620 to qualify for a conventional mortgage, but you'll need a much higher score than that to snag a great rate on a home loan. If you check your score and see it needs work, you'll know to take steps to boost it.

Similarly, it's important to make sure your credit report is accurate and free of errors that could cause a mortgage lender to deny you a loan. If you're listed as having outstanding delinquent debts that were never yours to begin with, that's the sort of thing you'll want to address before you're ready to fill out a mortgage application.

2. Pay off existing debt

Mortgage lenders rely heavily on credit scores to see who qualifies for a home loan. In addition, lenders will look at your debt-to-income ratio. That ratio measures the amount of debt you have relative to your income. The lower it is, the easier it becomes to get approved.

If you're hoping to get a mortgage next year, now's a great time to work on ditching some of your debt. If you have credit card balances, be sure to focus on them first, as less credit card debt could also result in a boost to your credit score.

3. Get a second job

If you're not sure you'll qualify for a mortgage based on your income but want a home loan next year, now's a good time to pick up a side hustle. When you apply for your mortgage, your lender will take your total income into account, including money you earn outside of your main job. And if you're able to show that your side income is consistent, you'll increase your chances of approval.

You may have an easier time finding a home to buy in 2022 compared to 2021. Make these moves in the near term so you're more likely to get the mortgage you need to become a homeowner in the new year.

Our Research Expert