What to Expect in the Mortgage Loan Process

The mortgage loan process can be very overwhelming if you don’t know what to expect. It’s an intense process that takes a very close look into your finances. Fortunately, the process isn’t a secret. If you know what’s going to happen ahead of time, you can be prepared with all the necessary documents and information. The loan process and move ahead smoothly and in a few weeks, you’ll be moving into your new home.

Application Form

At the start of the mortgage application process, you’ll complete a paper application that requests some basic information about you, your income, employment, monthly expenses, and the house you want to buy. The lender will ask a lot of questions about your current financial condition. These questions are aimed to figure out how much you can afford to pay for a mortgage each month.

You’ll be asked about your income from your job, interest earnings, commission, and any other income you’d like considered for the loan. Your current debt payments will also be considered including any other mortgage you have, car loans, student loans, credit cards, alimony, child support, etc.


You might have to provide several different documents to the lender. This includes, but isn’t limited to: your driver’s license, W-2 statements or pay stubs, past tax returns, bank statements for the past two or three months, auto loan titles if they’ve been paid in full, savings bonds or other investment certificates, child support or alimony payments, and proof of rental payments. Make sure you understand whether the lender wants originals or copies of these items. Always keep a copy for yourself.

Credit Check

Expect the lender to pull your credit history when they’re approving you for the mortgage loan. This usually includes both your credit report and your credit score. It’s a good idea to check your credit yourself before the lender does. That way there won’t be any surprises and you have a chance to clear up any negative items that could stand between you and your mortgage.

Down Payment

Your down payment can help you afford the home you want to purchase. Though a down payment of 20% is ideal, many lenders have mortgages that allow down payments as low as 3% and sometimes you can move in with no down payment at all.

If your down payment is less than 20%, however, you’ll have to get a second mortgage to make up the difference or pay monthly private mortgage insurance (PMI). PMI helps pays the lender if you default on your mortgage.

Lenders decide the size of your down payment, if any, based on the appraised value of the home you’re considering.


You might have to pay a mortgage application fee upfront, but most of the other costs associated with the mortgage process aren’t paid until closing, or settlement. That’s the day when the mortgage loan process ends and you get the keys to your new home. Make sure you come to mortgage closing with cash or check for the fees.