Getting a mortgage is a major financial decision, so it’s wise to first familiarize yourself with the home mortgage process.
The home loan process begins when you apply for mortgage pre-approval and ends when you close on your new home. Generally, it takes about 30 to 45 days, from the time you make a successful offer on a house until the mortgage closing, but it can vary depending on market conditions and individual circumstances.
Even if you know very little about how to get a mortgage, a dedicated loan officer will explain your options and guide you through the mortgage process.
How to select a lender
One of the most important elements of the mortgage process is finding the right lender. Compare potential lending institutions by analyzing interest rates and terms and fees for your budget range.
Once you decide on a lender, find out how to apply for a mortgage at that particular bank or credit union — many provide an online application to get you started. When you are getting a mortgage, lenders ask questions about your income, employment and savings, and they also review your debt-to-income ratio. Before closing on the home mortgage, you’ll need to provide the bank with documentation to prove ownership of your assets, including tax documents and pay stubs.
Getting a mortgage pre-approved
If you’re serious about buying a house, you’ll want to obtain pre-approval from a lender before starting your home search. Some banks offer a pre-approval program you can begin online.
In this preliminary step for getting a mortgage, the lender evaluates your credit and financial history before approving you for a specific loan amount. A loan officer gives you a pre-qualification letter after you meet the initial loan requirements.
At this point of the mortgage process, you should have a strong sense of how much you can afford for monthly payments, based on the type of mortgage loan you qualify for, available interest rates and your down payment.
For mortgage pre-approval, you’ll need to submit:
- Tax returns
- Bank statements
- Proof of other income
Getting pre-approved can make you a more competitive buyer. It signals to sellers that you’re serious and can improve your odds if you’re competing against multiple prospective buyers. It can also expedite the mortgage process once a buyer accepts your offer.
Pre-approvals are generally valid for 90 days. After that window closes, you’ll need to reach out to your lender to extend your pre-approval.
How to get a mortgage once you’ve found a house
Once a seller accepts your offer, the lender reviews your financial information, and the underwriting process begins. At this stage, it’s crucial to provide the lender any required documents in a timely manner to keep the mortgage process moving forward. In a competitive housing market, it’s essential to move quickly.
Since the house serves as collateral for the mortgage loan, the bank often orders a property appraisal to confirm how your offer compares to the home’s appraised value. Lenders also generally require buyers to insure their new home.
Offers are often contingent on a home inspection or property survey, so buyers can confirm the house’s condition and property boundaries before finalizing the deal.
Closing is the final step in getting a mortgage. Before closing day, you’ll receive a closing disclosure document, which you should carefully read. It includes all of the information about your mortgage terms, monthly payments and the amount you need to pay at closing.
At closing, you’ll provide a cashier’s check to pay your down payment and mortgage point fees if you choose to purchase any, along with any fees related to the appraisal, underwriting and title services. This is the final stage of the mortgage process. Once you sign the closing documents, you’ll receive the keys to your new home.
Step-by-Step: How to mortgage a house
- Choose a lender
- Apply for a home loan
- Obtain pre-approval
- Make an offer on a home
- Provide necessary documentation
- Close on the home