Setting yourself up for the best mortgage application can be intimidating—that’s why we’re here to help.
By knowing how to showcase your mortgage application in the best light, you can make strides toward getting the home loan you want.
If you’re wondering what the mortgage application process looks like, and how to prepare your application, we have answers.
With years of experience in helping mortgage applicants qualify for home loans, we know what it takes to qualify for a home loan. Homesite Mortgage is eager to help you achieve your goals of homeownership, and it all starts with the mortgage application. Let us be your guide through the mortgage application process.
What Steps are Involved in the Mortgage Application Process?
Before you dive into the details of mortgage application requirements, take in an overview of the basic steps that are involved in applying for a mortgage.
First, you’ll want to conduct a financial self-assessment to ensure that you’re aware of where you stand financially—consider how much debt you currently owe, how much money you have to offer for a down payment, and what monthly mortgage amount can fit into your budget.
Second, you’ll start working with a lender to get pre-approved and apply for the loan.
Third, mortgage origination and processing will occur. This is where a loan processor attains documents about your financial history, and the property you want to purchase. They will send this on to the underwriter.
Fourth, the underwriter evaluates your entire application and checks for accuracy, and approves or disapproves the loan.
Fifth, and lastly, the closing process will begin if you are approved for the loan.
What Documents Will You Need for Your Mortgage Application?
Recent Pay Stubs
The amount of pay stubs that you’ll need to submit depends on how frequently you’re paid. If you are paid weekly, be prepared to offer five pay stubs. If you’re paid bi-weekly, you’ll need three of your most recent pay stubs. If you’re paid monthly, have your most recent pay stub available. Your pay stubs shouldn’t be more than one month old when you submit your mortgage application.
If you’re self-employed, be prepared to offer two years worth of your most recent tax returns. This includes two years of personal tax returns plus business tax returns that were filed for your business.
In addition to your pay stubs, a lender will also want to have your W-2 forms from the past two years included in your mortgage application. Your W-2 form is attached to your tax return, so you can find it there when collecting mortgage application documents.
List of Current Debts
The lender of your loan will want to have a clear understanding of your current debts. List out any current debts, whether they’re from student loans, car loans, or credit cards—include the balance of those debts and the monthly payments you make on those debts. The lender will want to know what fixed payments are already being subtracted from your monthly income to decide if you can afford a mortgage payment for your loan size. Including a list of your debts will be be used in calculating your debt-to-income ratio which is a critical step of the mortgage approval process.
List of Assets
In addition to your debts, you’ll also need to list out your current assets in your mortgage application. This includes bank statements, mutual fund statements, other property titles (real estate and cars), and other investment statements. Qualifying for the loan you need will be easier if the lender sees that you have other assets that can be tapped into if your income is reduced.
Mortgage Application FAQs
Can I qualify for a loan if I’ve been in school and haven’t worked the past two years?
If you’ve been in school recently and therefore have not earned a regular income over the past two years, that’s something a good lender will take into consideration when evaluating mortgage applications. Some lenders may request a transcript of your school records to verify the dates you were enrolled in school. Homesite Mortgage understands that your working and financial history may not always be as clear-cut as the application itself and we are willing to work together to qualify you for the loan that’s fit to your needs and budget.
How will my credit score affect my mortgage application?
Your credit score is one of the pieces that your lender will use to evaluate your mortgage application, and upon qualifying you for a loan, decide what interest rate you’ll receive. Your credit score is determined by numerous factors, including payment history, current debt, how many lines of credit you’ve been issued, and the number of credit inquiries pulled in your name. Overall though, your credit score is only a portion of your entire application. A good lender will make a decision on the big financial picture you present.
Can I apply for a loan before I find a property to purchase?
Yes, starting the loan process once you know you’re ready to buy a home is a great idea. You can pre-qualify for a loan which is a useful piece of information to the real estate agent and/or sellers that you are already a pre-qualified buyer. Once you find the home you want to purchase, contact the lender who pre-qualified you and work together on completing the application process.
How long does the mortgage application process usually take?
The length of the mortgage process varies and largely depends on the lender you select, and how well you prepare your application ahead of time. Be sure to thoroughly include all the documents mentioned above in order for your lender to be able to quickly verify your information and make a decision. The time range of most loan applications from start to close is 20–45 days.
Have a question or want to talk with a lender?