• When you start the financial process, you will soon have to answer:
    • Do you want an adjustable-rate mortgage or a fixed rate mortgage?
    • What are your future plans? How long do you plan on staying in the home?
    • How about the term of the loan? Three year ARM? Ten-year fixed? Thirty years?
    • What loan amount do I qualify for? 
    • What interest rate does my credit score quality me for?
    • How much do I have to put down?


Prequalification 
 
Prequalification occurs before the loan process actually begins. The lender gathers information about your income and debts, and makes a financial determination about how much house you may be able to afford.

It's a good idea to know how expensive a home you can afford before you start shopping for one! If you are refinancing the loan on your existing home, then the prequalification process should help you decide whether refinancing is a good idea for you.
 
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Application
 
The application is the beginning of the loan process and either occurs after you have found a property you want to buy or have determined that you wish to refinance the loan on your existing home. You complete a mortgage application for a particular loan program and, supply all of the required documentation for processing. Various fees and down payment options are 
discussed at this time. The loan officer will deliver a Good Faith Estimate (GFE) and a Truth-In-Lending Disclosure (TIL) within three days that itemize the rates and estimated costs for obtaining the loan.
 
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Processing of your Estimated 
Loan
 
The lender will typically submit the application package to an automated underwriting system that will provide the lender with the necessary documentation needed for loan approval. In some cases, the lender may also manually underwrite an application package.

The lender's processor reviews the credit reports and documentation to verify your employment, debts, and payment histories. If there are unacceptable late payments, collections, judgments, etc., the processor requests a written explanation from you. The processor also reviews the appraisal and survey and checks for property issues that may affect final loan approval. The processor's job is to put together an entire application package for the lender's underwriter.
 
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Underwriting
 
The lender's underwriter is responsible for determining whether the application package prepared by the processor meets all the lender's criteria. If more information is needed, the loan is put into "suspense" and you will be contacted to supply more documentation