The 8 Step Process of Acquiring a Mortgage

You are in the process of buying a home and need a mortgage, but aren’t quite sure of the steps? California Wholesale Lending has you covered with an 8 step-by-step process of getting a mortgage for your home. A mortgage is a type of loan that you use to purchase a home and it’s a great idea to get familiar with the steps you will go through beforehand. Let’s go through the 8 step process of getting a mortgage for your home:

1. Application Process

During the application process, there is a pre-approval period that you will go through to learn how much a mortgage lender is willing to give you. During the pre-approval and application process, the lenders will take a look at your income, assets, and credit — in turn telling you how much they can give you. These factors also impact your interest rate. 

2. Credit Ordered, Disclosure Issued

The first step in the application and pre-approval process is to answer questions about your income, your assets, yourself, and the home you want to purchase. You will then give your mortgage lender permission to take a look at your credit. Your credit report is a compilation of any borrowing history from credit card companies, banks, credit unions, car loans, etc. 

3. Gather Documents

The paperwork needed for the approval process is crucial! There are 5 major documents you will need for the pre-approval and approval process. You will need your proof of assets, proof of income, credit check, employment verification, and identification (driver’s license, passport, social security card). The faster you get these documents to your potential lender, the faster the process can be. 

4. Appraisal Ordered

A home appraisal is a true estimate of what a home is worth. Your lender will order an appraisal on the home you are looking to purchase so that there is an objective way to assess the home’s value and ensure that the money being borrowed is appropriate and accurate. This also prevents the lender from giving the seller more money than the home is truly worth. The appraisal must be done by a third party who has no connection to the buyer, seller, or lender. 

5. Submit to Underwriting

What is underwriting? Underwriting means that your mortgage lender will verify your property details, debt, assets, and income to get the final approval for your loan. An underwriter is someone who is a financial expert and double-checks your finances and documents given are true and assesses how much risk a lender will take on the client if they decide to approve your loan. 

6. Approval

Drum roll please….you have been approved! Getting approved for your mortgage loan means that your lender has reviewed, double, and triple-checked your financial situation and documents and confirmed your ability to take on mortgage payments. The approval means that you have an amount to borrow, your interest rate is set and you have made an agreement on how much your payments will be. Your real estate agent can then use this information to focus on homes you can afford. A mortgage approval also lets the seller know that you are serious and you can afford the home you are buying. 

7. Clear to Close

You are ready to close this deal with your mortgage lender. You have met all of the requirements and conditions your lender needs to issue you the money for your home. At this time, you are a verified borrower and you have met all of the expectations for the type of loan and amount of mortgage you are requesting. 

8. Closed to Funded

Once you, as the borrower, have signed the loan documents, you have closed the deal! Funding will happen once the lender reviews the signed documents and gives the title company access to the money. The home loan will finally become official after funding. The close funding process will usually take place on the same day. After your loan has been funded, you can fully enjoy your new home!

California Wholesale Lending hopes that this 8 step-by-step process is more clear now and you have better knowledge of the application and approval process for a mortgage loan. We are always here to help! Please reach out with any mortgage loan questions or homebuyer questions directly to our email at: Tony@cawlr.com.