Understanding The Mortgage Process

A mortgage is important for most people who want to buy a home. While common, mortgages and the process involved in applying and securing one are not understood well by most people. If you are interested in buying a home and need a mortgage to do so, this guide will help you understand the process.


A pre-qualification is one of the first steps in the process of securing a mortgage. Basically, this involves qualifying you, which helps determine how much home you can realistically afford to buy based on your income and credit score.

If you have found the home you want to purchase, a pre-approval may be recommended to speed along the process. Pre-qualifications and pre-approvals are similar but not entirely the same.

A pre-approval is more involved than a pre-qualification since the lender does a more involved check into your income and credit. The pre-approval letter from a lender shows sellers that you are more than just interested in the home to buy — you are actually ready and able to buy and close on the home.


After the application has been submitted and you have been approved, a few processing steps will take place.

An appraisal and inspection of the home you are trying to buy will be ordered. The appraisal details the value of the property, ensuring you are not borrowing more than the home is actually worth.

An inspection is also helpful for you as a buyer. All minor and major issues are documented, reducing your risk of buying a home that requires extensive and costly repairs. In many cases, you can use the inspection report to negotiate a lower sale price, or you can ask the seller to make updates/repairs before the closing date.


The mortgage process will also go through an underwriting stage. During underwriting, professionals review the entire loan package, which includes your income statements, credit, and information pertaining to the actual home.

For many buyers, underwriting can be a stressful and worrisome time. However, as long as all documents are accurate, underwriting should be successful.


Once all contingencies are met and the underwriters approve your loan package, you can schedule a closing date.

Before the actual closing date, you will be notified about the total amount of your closing costs and your down payment to ensure you are prepared. At closing, you will sign papers on the purchase of the home and receive your keys from the seller.