ORGANIZE DOCUMENTS
Before starting your mortgage journey, organizing your documents is crucial. Having everything ready makes the application process faster and less stressful. Below is a detailed checklist of documents you should prepare:
Income Documents:
● Recent pay stubs (typically covering the last 30 days)
● W-2 forms for the past two years
● Federal tax returns for the past two years (for self-employed individuals,
additional business tax returns may be required)
Asset Documents:
● Bank statements for the last two months
● Investment account statements (stocks, bonds, etc.)
● Documentation for other assets, such as real estate, vehicles, or other
investments
Credit History:
● Recent credit reports from all three major credit bureaus (Experian,
Equifax, and TransUnion)
● Details of outstanding debts, including credit card balances, auto loans,
and student loans
Personal Identification:
● A copy of your driver’s license or passport
● Your Social Security card
Property Information:
● The purchase agreement, including details about the property you’re
buying
● The property appraisal report
Other Documents (if applicable)
● Gift letters (if you’re using gifted funds for your down payment)
● Divorce decrees or child support orders (if applicable)
Having these documents meticulously organized will ensure a smoother
mortgage application process.
Getting Qualified And Approved
Pre-Qualification: Pre-qualification is the initial step in securing a mortgage. During prequalification, you provide basic financial information to a lender, who then offers
an estimate of how much you might be able to borrow. This is a preliminary
assessment and doesn’t delve deeply into your financial history. It serves as a
useful starting point to understand your budget and affordability.
Pre-Approval: Pre-Approval advances your mortgage application to a more comprehensive level.
It entails submitting all your financial documents for a detailed review. Upon
approval, you receive a pre-approval letter from the lender, specifying the
amount they are willing to lend you. Having a pre-approval letter can strengthen
your offer when purchasing a home and demonstrates your commitment to the
process.
Opening the File
Once you’ve selected a lender and received pre-approval, your mortgage file
officially opens. During this stage, the lender reviews your application, collects all
necessary documents, and performs an initial review. Your dedicated loan
processor will ensure all information is complete and accurate.
Processing The Loan
The loan processing phase involves an in-depth examination of your application.
This includes verifying the information you’ve provided, such as your income,
employment history, and credit report. The processor also orders an appraisal of
the property to ensure its value aligns with the loan amount. Additionally, your
application is evaluated for compliance with lending regulations.
The Underwriting Process
Underwriting is the final review before the lender approves your loan. During this
stage, a skilled underwriter meticulously examines your application and all
supporting documents to assess your creditworthiness and the risk associated
with the loan. The underwriter ensures that you meet all the lender’s
requirements, making this a critical step in the process.
The Closing
The closing (also called settlement or escrow) is the final stage where you officially become a homeowner. Here’s what to expect:
1. Review of Closing Documents
You’ll meet with a closing agent or attorney who will guide you through signing the necessary documents:
⦁ Loan Estimate & Closing Disclosure — review loan terms, interest rates, payments, and costs.
⦁ Promissory Note — your promise to repay the loan.
⦁ Deed of Trust or Mortgage — establishes the property as collateral.
2. Payment of Closing Costs
You’ll pay closing costs (appraisal, credit report, title search, insurance, etc.) via certified check or wire transfer.
3. Verification of Identity & Signatures
Provide a government-issued photo ID, and all parties sign the necessary documents to legally transfer ownership.
4. Title Transfer
A title company confirms there are no liens or legal issues. Once cleared, the title is transferred to you.
5. Funding & Disbursement
The lender transfers funds to the seller, and the property officially becomes yours.
6. Closing Statement & Receipt
You receive a final statement detailing all costs and credits. Review carefully to ensure accuracy.
7. Key Handover
Once everything is complete — you receive the keys and officially become a homeowner. Congratulations!
