The mortgage loan process starts with you. Use the internet to your advantage and read up on the process. Sites like this one are great for familiarizing yourself with common terms and what to expect as you go along. Also, don't be afraid to call a couple different brokers and pick their brain. You aren't obligated to anyone and you'll be able to get a feel for whether or not it's someone you are comfortable doing business with.
Step 2
Application
When you are ready to move forward, it's time to begin the mortgage application process. There are many ways to accomplish this. Some companies offer full online application processes that limit your involvement with a live loan officer. Some companies are more traditional and only operate by phone or in person. Most, though, fall somewhere in between. In many cases, you may start by submitting basic contact and loan information. From there, a loan officer is likely to follow up and go further in depth to take a full application. There are some basic things that will be required of you (read more about required documents).
Step 3
Pre-Approval
Within three business days of completing your application, you will receive a good faith estimate detailing your loan including all required fees. Studies have shown that 90% of borrowers could not correctly identify the amount of upfront charges on their GFE so make sure you ask questions as necessary.*
Your loan officer will probably let you know about documents that are needed and they will be turned over to a loan processor. This person is responsible for moving the loan through the mortgage application process. Your application will be submitted for approval as soon as the loan processor has all the necessary documents.
Step 4
Approval
Once your loan has been approved, you are well on your way, but hold on tight. Most approvals are conditional, meaning that certain conditions must be met before a loan can actually close. You will be told what else is needed and what you have to do to help move the mortgage loan process along.
Examples of common conditions include verifications of such things like employment, existing mortgage and bank statements. There are also other conditions that may require you to take action. Final approval typically takes about two weeks but can vary based on how easy the conditions are met.
Step 5
Closing
Once all conditions are met, the final approval is made and the loan is considered funded. At this point, any transfer of funds will take place through an escrow account.
Step 6
Signing
Once funds have been disbursed through escrow and the three day right of recision period has passed, a signing takes place where you sign all the necessary documents in the presence of a notary.
Remember that no mortgage loan process is perfect and that there may be some hiccups as you go along. Just make sure you know what is expected of you and what timeline you need to keep. If you have a 30 day lock, you need to get that loan funded before the lock expires.
