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The Mortgage Application Process

Paperwork You’ll Need for the Loan Application

When it comes time to submit your loan application, your lender will ask for a lot of different documents. Use this checklist to help get your paperwork in order.

  • Tax returns

  • W2s and/or 1099s

  • Recent bank statements

  • Recent paystubs

  • Residence history

  • A list of all your debts, such as credit cards, car loans, student loans

  • A list of all your assets, including investment and retirement accounts

Additional documents may be required. Check with your loan officer for a complete and final list.

Application Process

Once you’ve submitted your loan application, it triggers a series of events that must take place before you get your loan approval.

The Loan Estimate: Within three days of submitting your application, your lender must provide you with a Loan Estimate (LE), a form that outlines that details of the loan that you’ve applied for. This is not a loan approval but rather a summary of what your loan will look like should you decide to move forward.

Processing: If you decide to move forward, the application will then get turned over to the processor, who reviews the loan file to make sure all the necessary paperwork is present. The processor will work with your loan officer to collect all the documentation needed for the loan. During the processing stage, an appraisal will be ordered on your prospective property to determine the value of the home.

Appraisal: During the appraisal process, a licensed third party will evaluate the property to ensure the home is worth the purchase or sales price. The appraiser will look at the home’s condition, age, and size. He or she will compare the property to other home sales in the neighborhood and consider the replacement cost of the property.

Underwriting: Once the processor has compiled a complete loan file (i.e., the application and all supporting documents), the underwriter reviews the application in detail to make the final decision to approve or deny your mortgage loan. This includes reviewing your employment history, credit history, and the appraisal report. The underwriter also ensures your mortgage meets current loan product guidelines. If the underwriter requests further documentation, you will be required to provide it before going forward. This happens often, so don’t be alarmed if you’re asked to provide additional documentation.

Loan Commitment/Approval: If the underwriter approves your application, you’ll receive what’s called a loan commitment letter, which confirms your approval for the loan. This document outlines the details of your loan, including the amount being borrowed, the interest rate, and the term or repayment period.

Once you’ve received your loan commitment, the next step in the process is closing on your home.

What NOT to Do During the Loan Process

Once you’re cleared to close, you may want to go out and celebrate by buying new furniture or appliances, but doing so could jeopardize your loan approval. Here are some steps you should avoid taking until you’ve closed on your home.

  1. Don’t apply for credit (such as a new credit card, car loan, or financing for furniture or appliances)

  2. Don’t make major purchases

  3. Don’t liquidate funds

  4. Don’t make large deposits

  5. Don’t switch jobs

All of these factors could impact your eligibility for a loan and delay your final closing, even if you’ve already been approved.

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