The 9-Step Guide to the Mortgage Loan Application


So you’ve decided that you would like to purchase a home. Maybe you tried to contact real estate agents, but they told you to return after you’ve been “preapproved.” Then, you might be wondering: How do start the process for obtaining a mortgage loan.

The mortgage loan process can seem confusing and complicated if you’re purchasing for the first time. You might be asking yourself, “Is there a way to get a loan with my credit score?” How long is it? Where should I start? Know your answer via

These are the steps that will get you a mortgage.

9 Steps for Getting a mortgage

1. Get Preapproved

Any home buyer should first get a preapproval for a mortgage. A preapproval can be described as: Before looking at the market, it is important that you know how much you will get from a lender.

As you have probably seen, real estate agents will not give you too much of your valuable time without preapproval (especially in a sellers market). They make commission. You might not be taken seriously by them, nor sellers, unless you provide them with a preapproval. Find out more about our Verified Aproval process .

Your credit score is pulled once you have been preapproved. This gives the lender two things: Your credit score and information from your credit reports. For a conventional loan through Fannie Mac and Freddie Mac, you’ll need a credit score between 580 and 620. While a VA loan that is backed in part by the U.S. Department of Veterans Affairs (VA) doesn’t require you to have a specific credit score, lenders can provide guidelines. At Rocket MortgageR, we look for a credit score of at least 580 for VA loans.

Lenders will examine your credit score. Even if your credit history shows something similar, you might still be able to qualify for a mortgage.

In order to calculate how much you are able to pay based on a ratio of debt-to income (DTI), the lender will need to know about your income.

Additionally, you will be matched up to a preliminary loan programme. This could change at any point.

2. Prepare Your Documents

In short, lenders need to know about your debts and assets as well as credit history and proof you work and earn. It is not necessary to submit all documentation in order to get your loan preapproved. It is important to give as much information as possible upfront to your lender. The seller and you will both have more confidence that your loan approval will come through.

Let’s go over the documents you need for your mortgage application.

To verify yourAssets and liabilitiesThese are the things you’ll need to know:

  • Statements about bank accounts
  • Recent statements of your investment portfolio (including retirement, stock- and bonds)
  • Receipt gifts funds
  • Documentation about your current mortgage
  • Verification and payment of any outstanding debts, like student loans or auto loan.

When validating yourCredit historyYour loan provider may ask for the following:

  • Permission granted to access and review credit reports
  • A detailed explanation for financial mishaps appearing on your credit record, including bankruptcies.

Finally, prove yourEmployment and incomeThe following information is required for records:

  • Name, address, as well as contact information for your current employer
  • 2 years of W-2s
  • If you are self employed, profit and losses statements
  • Photocopy of proof of child maintenance, alimony, and other types income
  • 1040 tax forms

While you can submit income and assets documentation at the underwriting stage later, it will give you a better picture of what your budget is.

3. Set your budget

The lender’s preapproval letter will inform you how much money they are willing to lend. However, just simply because you can borrow a certain sum doesn’t mean that you should stretch your budget. To estimate your monthly mortgage payment you can use a mortgage calculator that allows you to enter different purchase prices. If you have an idea of what the costs of taxes and insurance will be, you can add these to your mortgage calculation.

You want to make sure that you have enough money for investments, emergencies, and other costs each month. Make sure to make some extra money for fun.

4. Start House Hunting

Going to houses is often the best part about the mortgage process. You can visualize what your life would look like in each home that you view. It’s essential to create a game plan before you begin.

It’s possible to find a home with all the features you want, depending on your budget. Make a list highlighting the most important features you need in each house you’re considering to ensure you save time while you search.

Once you have put together your wishlist, we recommend hiring an agent. They are knowledgeable about the market. They’re familiar in the market. Rocket Homes R can help connect you with an agent who can assist you in finding the perfect house.

5. Make an offer

Let’s imagine you’ve finally found the perfect house. Now is the time to place an offer. Here are some important things to remember. To create the purchase agreement, you’ll need to work with an attorney or real estate agent. It should include your offer for sale price and a list if there is anything else from the house. These types of details can be changed, but sellers want an agreement without strings attached. This may prevent sellers from asking for concessions, or even furniture inclusions.

Also, this is the stage where you make an earnest-money deposit. This is a percentage that the seller receives when you accept an offer to purchase the property. It’s a sign that your serious about it.

6. Finalize the loan

Once you have legally binding your offer with a purchase contract, you are ready to apply and close the terms of your loan. You’ll need information about the mortgages you are eligible for. Compare their rates and settle on a downpayment amount. Finally, choose a term length.

The paperwork comes next. After you have submitted most of your paperwork for preapproval, you will need to gather any additional documentation to be able to close the deal. You will need to provide any additional information about your income, assets, debts, and credit.

Once your application is complete, your lender will send you an estimate of the loan amount. This document does not signify that you have been approved. It will however outline the details for your mortgage arrangement.

7. Wait For Underwriting

Once your offer is accepted the purchase agreement is sent to your banker. Your options will be reviewed by your banker to make sure you are within the right loan program. Once you have received approval, your loan will be subject to underwriting.

Underwriting involves verifying your income, assets and work history and comparing them to your credit report. Lenders pull the credit of potential borrowers at the beginning of any loan process. Preapprovals are valid for 90 days. If you have been house hunting for a while it might be necessary for the lender pull your credit card again. Do not acquire additional debt during house hunting. This could lead to your financing being compromised if you simultaneously try to buy a house.

You and your lender will agree on when to lock your interest rates before closing on the property. Mortgage rates can fluctuate multiple times per day. A mortgage rate lock will guarantee that your interest is fixed until closing or for 30 to 60 days following the lock’s effective date.

If they need additional documentation for approval, your lender might ask you to provide it.

8. Get The Property Appraised

While you are going through the underwriting, your lender will conduct a home assessment. The appraisal protects both the lender and you by proving the home’s value.

The appraisal will compare the home against similar properties in your area. It means that the appraiser compares your property to similar properties in the area. The appraiser then looks at the sales data, calculates the dollar value, and you can choose the best home for you.

If the appraisal value comes in lower that the sale price, there are 3 options. You can ask the seller to lower the price or you can negotiate the difference.

9. Do Not Close

The underwriting process is over. Now it’s time for you to get to the final table. At the closing table, you will bring photo IDs, copies of your Closing Disclosure, the down payment, and any other closing costs. Finally, you will sign and receive the deed.

There are ways to keep closing costs down. This can be done by increasing the value of your offer in an effort to convince the seller that they will pay more. The closing costs can be rolled into your loan.

How long does it take for a mortgage to be approved?

What is the average time it takes to get the keys now that you are familiar with the process? This is a personal decision and will vary from one person to another, but here’s a rough estimate.

Rocket Mortgage(r), Quicken Loans,(r) can help you get preapproved by sharing information about your income and assets from your bank. Although you can start the process over the telephone, most people can expect to receive preapproval within one day.

Shopping for a property is often the most tedious part of this process.

Quicken Loans will try to close your loan as soon as you have completed your purchase agreement.

In addition to looking for the right home, the next most important step in the process can sometimes include getting an appraisal. There are some areas of the country with a shortage or qualified appraisers. It is important to set realistic expectations for buyers and sellers if they are looking to buy in these areas.

This will help to speed up your process. This is perhaps the most important aspect of the mortgage process that you have control over.

Once you are familiar with the process, you can get started. You can apply online for preapproval or call one if our friendly home loan experts at (800), 785-4788. We are happy to answer any questions you may have in the comments.

How Long Does the Mortgage Loan Process Take?

What is the average time it takes to get the keys now that you are familiar with the process? This is a personal decision and will vary from one person to another, but here’s a rough estimate.

Preapproval — One Day

Rocket Mortgage can preapprove your income, assets and bank documentation. The majority of people will be preapproved within 24 hours, even if they are starting over the phone.

Loan Closing in 30 Days

Once your purchase agreement is signed and underwriting has begun, we aim to close your loan as soon as possible here at Quicken Loans .

In addition to looking for the right home, the next most important step in the process can sometimes include getting an appraisal. There are certain areas where there is a shortage. It is important that the buyer and the seller have realistic expectations when purchasing in these areas.

This will help to speed up your process. This is perhaps the most important aspect of the mortgage process that you have control over.

The Bottom Line: This is the first step toward finding a new home.

When you get to closing day you will be rewarded by a new home as well as the official status. It can be difficult to move on from the beginning. Mortgage applicants who understand each step will make it as easy as possible to complete their application.

Once you are familiar with the process, you can get started. Online approval can be initiated or you can call our friendly home loan experts at (800-775-84788). Feel free to ask us questions by leaving them in the comment section.

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