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For those of you who are attempting to get a home loan, the mortgage loan process might be a difficult procedure to endure and one that is fraught with misunderstanding. Many of you have feelings of powerlessness while intimate details of your financial history, credit history, employment history and other personal issues are delved into by strangers in the lending business who will have the ultimate power to grant or deny you access to a mortgage loan.

If you had a better understanding of the mortgage loan process, you may feel a little more at ease while you proceed through the limbo that can be part of the waiting period. Learning how lending institutions make determinations on whom to lend large sums of money to, will give you a higher appreciation for the risks involved for the lender and thus more patience for the mortgage loan process itself. With this in mind, let’s go through what actually transpires once you file a loan application with a mortgage lender or a bank.

Once you file your loan application, you will be advised on the different mortgage loans that are available to you and which one may be best for your particular situation. After it is determined which mortgage loan best suits your needs, the application is filed electronically to an approval process, which cross-references your inputted data with the qualifications that are required for the type of loan you have chosen. An automated pre-approval is rendered if you meet the qualifications required for your specific loan. Some of these qualifications can include: available cash for a down payment, requisite credit score, low debt-to-income ratio, solid work history, etc.

The next step involves verification that the information that you provided on the application was factually correct. As long as you were truthful in your application answers, you have nothing to worry about here. The lender is required by law to verify your answers with tangible proof such as Tax returns, Bank statements, Pay stubs, W2’s, etc.

You will likely be asked to provide an appraisal of the property and a fully signed purchase contract if you are purchasing a new home. Additionally, proof of insurance and a preliminary property title report will be needed. Once these items are delivered to your mortgage loan officer, he/she will submit them along with your loan application the underwriting department.

Check Back For Part Two

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