The mortgage process can be intimidating, especially for many first-time home buyers. However, when the process is broken down into several steps, it is easy to follow. After  making a decision about the type of the loan you would like to aquire, the process starts with an application, moves on to the processing phase, then the approval segment and finally closing.

The Application
During this phase, the home buyer will need to provide documentation about current income, bank accounts and long-term debt (credit cards, auto loans, child support, etc.). Most lenders charge an application fee, which can usually be paid with a credit card over the phone. Depending on the borrower's down payment and credit history, some loans can be approved during the application stage. A number of lenders apply the application fee toward the cost of the appraisal and credit report. Other lenders may not apply the application fee to the overall cost of the mortgage, which can result in an additional fee for the borrower.

Pre-qualification
This simple process will give you a much clearer idea of how much of a loan you can expect to obtain and help you set realistic home-shopping or savings goals.

Good Faith Estimate
First-time buyers are often surprised by the hidden costs. By law, your lender or broker must provide a written Good Faith Estimate. This document estimates the total costs involved in getting a loan. It includes lender and broker fees, loan-related fees and third-party fees such as title insurance and appraisal. Most of these fees must be paid at closing. Remember, this is only an estimate. Delays caused by you or the lender can increase the costs.

Processing the Application
Once an application is complete, the lender begins processing the borrower’s information. An appraisal of the home and a credit report are ordered, and the borrower’s employment and assets are verified. The lender then provides specific loan information and an estimate of closing costs to the home buyer.

The Approval Phase
During the approval phase, the mortgage lender evaluates the application, including its supporting documentation, and approves or denies the loan. Recent changes in the industry have allowed some mortgage companies to reduce the amount of time it takes to process a loan.

Escrow
You are "in escrow" from the time you signed your contract and the deposit is sent to the escrow company until your home sale has closed and the title has been transferred from the seller to you. An escrow company is a neutral third party that holds documents and funds for incremental disbursement as each of the various conditions of your sales contract are met.

The Closing
After a loan is approved and the title search completed:

• Review the final loan documents with a closing agent. A representative of a escrow/title company fills this role.
• The final loan document details the final costs involved in the home purchase.
• Sign the loan documents including the mortgage, Truth in Lending statement, etc. Be sure to bring valid proof of identity.
• Provide the closing agent a cashier's check or wire transfer to cover the down payment and closing costs.
• Your lender gives the closing agent the funds for the amount of the home loan.
• When the lender is ready to fund the loan, the closing agent records all the documents and closes escrow.
• You receive the keys to your new home and copies of all the closing documents after funding. 


Congratulations! You are ready to move into your new home!