The Mortgage Process

Would-be borrowers begin the process by applying to one or more mortgage lenders. The lender will ask for evidence that the borrower can repay the loan. This may include bank and investment statements, recent tax returns, and proof of current employment. The lender will usually run a credit check as well. If the application is approved, the lender will offer the borrower a loan up to a certain amount and at a particular interest rate. Thanks to a process known as pre-approval, homebuyers can apply for a mortgage after they've chosen a property to buy or even while they're still shopping for one. Being pre-approved for a mortgage can give buyers an edge in a tight housing market because sellers will know that they have the money to back up their offer. Once a buyer and seller agree on the terms of their deal, they or their representatives will meet at what’s called a closing. This is when the borrower makes their down payment to the lender. The seller will transfer ownership of the property to the buyer and receive the agreed-upon sum of money, and the buyer will sign any remaining mortgage documents. The lender may charge fees for originating the loan (sometimes in the form of points) at the closing.