A step-by-step guide so you know what to expect from application to closing

Process of a Loan: What to Expect

Your home loan team
Before you begin, it’s important that you know the key team members involved. Understanding what they do can help you more easily navigate the process.

Your Mortgage Loan Officer will provide you with information to help you determine the loan that best fits your needs, take your application and explain what to expect during each step in the loan process.

Once your application has been submitted, your Loan Processor will work with you to collect needed documents and keep you informed of key activities, such as the property appraisal and underwriting status.

During the loan application and closing, your Real Estate Agent may also work with your lender to provide information about the home you’ve contracted to buy.

Upon Final Loan Approval, your Closing Specialist will contact you to schedule the date, time and location of your home loan closing. He or she will also address any questions you have about your closing documents and provide you with the total closing cost and any down payment amount you’ll need.

Step 1: Submitting your application and documents
Submitting a complete application with all the required documents helps reduce the chance of surprises or delays later in the process.

Once you’ve found the right home and negotiated the purchase contract with the seller, you’re ready to apply for your home loan. Your Mortgage Loan Officer will take your application in person or over the phone. The goal of our application is to gather as much information as possible up front.

(For refinance transactions, contact your Mortgage Loan Officer to begin your application.)

  • Current and previous addresses for last 2 years
  • Property information (if applicable)
  • Current and previous employment information for last 2 years, including dates and monthly salary
  • Current monthly housing expenses such as rent or mortgage payment

After taking your application, your Mortgage Loan Officer will review your next steps and remind you of the documents needed to complete your application. We need your help getting your documents in as fast as possible.

Below is a list of the most common documents needed to support your application.

  • Two most recent consecutive pay stubs, if applicable
  • W-2 statements from past two years, if applicable
  • Signed personal tax returns from the past two years (all pages and schedules required)
  • Signed business tax returns from the past two years (all pages and schedules required), if self-employed
  • Most recent YTD profit/loss statement, if self-employed.
  • Source of other incomes (award letter, lease agreement, cancelled checks)
  • Two most recent bank statements for all financial accounts
  • Most recent monthly statement for properties you own, including taxes, insurance and HOA
  • A copy of the signed Purchase and Sale Agreement, if purchase transactions

Depending on your individual situation, you may need to provide additional documentation.

Step 2: Processing your application
You’ll receive your Home Loan Welcome Package, which contains important documents to read, sign and return, so we can process your application.

Your Mortgage Loan Officer will follow up to ensure you have received your Welcome Package and can address any questions you may have. You should thoroughly review all the loan documents and disclosures that are in the Welcome Package, including the Loan Estimate.

The Loan Estimate is a good faith estimate of closing costs and fees, as well as the loan terms. Your Mortgage Loan Officer delivers or emails this document to you within three business days of submitting your mortgage application.

Your Welcome Package contains documents that must be signed and returned to us via fax or email/mail.

Letters of explanation may be required as a condition of loan approval and can be used to provide additional detail on your application, credit report or documentation. All letters of explanation must reference the instance (Please be as specific as possible) and must be signed and dated.

Letters of explanation must be prepared by the applicant and may be required for the following reasons:

  • Employment history inconsistencies among your credit report, loan application and/or income documentation information
  • Employment history gaps appearing on your loan application
  • Name variations on your credit report
  • Derogatory credit; please be sure to detail what caused it to occur and steps you have taken to prevent future occurrences
  • Address inconsistencies between your credit report and loan application
  • Credit inquiries reflected on the credit report; each inquiry must be explained, and any new credit obtained as a result must be disclosed
  • Overdrafts occurring in your bank account
  • Bank account deposit activity that is inconsistent with paycheck deposits or other prior activity in your bank accounts. Any recent large deposits inconsistent with your account history must be disclosed and explained. Additional supporting documentation may be required.
  • Source of funds for recently opened asset accounts

After you submit your application, your processor will order:

  • A professional appraisal to provide an estimate of the property value for lending purposes
  • A title search to ensure there are no outstanding issues with the property that could hold up or stop the process

Your Mortgage Loan Officer will keep you updated on the status of the appraisal and let you know if there are any outstanding issues with the title search.

If a home inspection is specified as a requirement in the purchase agreement, ensure the home inspection is completed as soon as possible and before the expiration of any stated contingency date in order to protect your purchase rights. The goal of the inspection is to identify any issues with the home that might require further action. If an inspector finds something wrong, and your sales contract allows, you can request that the seller make and pay for the repairs.

If you qualify, Your Mortgage Loan Officer will call to confirm you have received Conditional Approval based on a review of the information and documents you submitted.

Conditional Approval is an initial credit decision. Additional conditions, items or documents must be received and confirmed by us prior to Final Loan Approval.

Common conditions include receipt of documents to support income and assets, as well as a homeowner’s insurance policy, an acceptable title insurance binder and property appraisal supporting the purchase price or stated value.

Step 3: Finalizing your application
After Conditional Approval, any remaining documentation must be collected and requirements related to the property must be met so we can finalize your home loan.

Your Mortgage Loan Officer will alert you of any outstanding documentation needed. It’s critical that you return outstanding documents as soon as possible in order to avoid having your application delayed.

Homeowners insurance is required for everyone who has a mortgage. Ask your insurance agent for documentation that shows the coverage you have and proves that your insurance policies are current.

Flood insurance will also be required if the property is in a Special Flood Hazard Area. Your Mortgage Loan Officer will let you know if this is a condition of your loan.

If you haven’t already, you’ll need to lock in your interest rate anytime up to 10 days before your loan is closed. Contact your Mortgage Loan Officer when you are ready to lock in your rate.

The Underwriter will now review your loan and verify that all conditions have been taken care of. The loan process is now complete and is ready for closing.

Step 4: Closing and managing your home loan
After Final Loan Approval, the last step is to close on your new home loan.

Your Closing Agent will contact you to confirm the closing date and review details related to the loan closing.

You will receive the Closing Disclosure at least three business days before your scheduled closing. Your Mortgage Loan Officer will review the final details of your loan with you. He or she will outline the amount you’ll need to bring to closing for any down payment and closing costs. The three days also gives you time to ask your Mortgage Loan Officer any questions before you go to the closing table.

Closing Disclosure Explainer

Get a cashier’s check from your bank for your down payment and closing costs. You can also check with your closing agent to see if wiring funds is an option.

At your closing, take time to review and read all your documents. Some key documents you will review and sign during closing are your Deed of Trust or Mortgage and Promissory Note. Review and compare your Final Closing Disclosure to the most recent Initial Closing Disclosure you received.

If you have any questions, be sure to ask.

Download your closing checklist Guide to closing forms


You are now leaving the Mortgage Mac website. Links to other websites found on the Mortgage Mac site are intended to provide assistance in locating information. Mortgage Mac does not endorse, guarantee, or attest to the accuracy of any information provided by these other sites. Mortgage Mac is not responsible for the content of these other sites and these sites are in no way operated by Mortgage Mac. The privacy and security policies of these linked sites may vary from those of the Mortgage Mac; therefore, it is advised that you review the privacy information of each site visited.