Steps In Mortgage Application Process Leading To A Clear To Close

Steps In Mortgage Application Process Leading To Closing

Gustan Cho Associates are mortgage brokers licensed in 48 states

In this article, we will discuss and cover the steps in mortgage application process leading to closing. Understanding the steps in mortgage application process can seem overwhelming to those unfamiliar with the mortgage industry and the mortgage loan process. Often borrowers enter into the steps in mortgage application process without ever knowing what steps or stages there are in the mortgage process of purchasing a home. In this article, we will explore the mortgage application process step of the mortgage process and outline steps in mortgage process borrowers should take to ensure a smooth, successful overall mortgage process.

Applying For A Mortgage Is The First Step In Mortgage Process

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When applying for a mortgage, potential borrowers have multiple options. Here are the preliminary steps in applying for a mortgage loan and getting qualified for a home loan. Many borrowers first start by choosing a mortgage lender. It is important for borrowers to have a general idea of credit to prevent applying with a lender who has mortgage lender overlays that will not allow the applicant to be qualified.

Mortgage lender overlays are additional mortgage lending requirements that are implemented by each mortgage lender that surpass the minimum mortgage lending guidelines by the particular mortgage loan program. For example, FHA requires a minimum of a 580 FICO credit score for a home buyer to qualify for a 3.5% down payment home purchase loan.

However, most mortgage lenders will not accept a credit score of under 640 FICO credit score even though FHA’s minimum credit score requirement is 580 FICO credit score. This is called an FHA mortgage lender overlay on credit scores. This is legal, where a lender cannot accept the minimum FHA requirements and can set their lending standards.

Steps In Mortgage Application Process

Before applying for a mortgage, borrowers are urged to ensure they have documents that will be required to be submitted. Here are the documents required to get pre-approved. These documents include bank statements, tax returns, paycheck stubs, and proper identity verification documents.  Now that you have all your required documentation and selected your lender, it’s time to apply! During the application, you must provide income and asset information, expense information, and consent to a credit check. You will submit to your mortgage loan officer all the documentation listed above. Then your loan officer will begin to qualify you using Desktop Underwriter (DU) or Loan Prospector (LP).

The Initial Steps In Mortgage Application Process Is Getting Automated Underwriting System Approval

DU and LP is the Automated Underwriting System, often called AUS. DU is the Fannie Mae version of the AUS, and LP is the Freddie Mac version of the AUS.

Do not be alarmed if you are asked to follow-up questions or are requested to provide additional documentation based on items found on the credit report.

These requests ensure that all aspects have been reviewed and that your pre-approval is a solid approval. This is the work of a good, detailed loan officer. One of the main reasons for delays in the mortgage process is that borrowers turn in incomplete documents. Make sure all documents are complete, including blank pages.

Steps In Mortgage Application Process: The Importance Of The Pre-Approval Letter

What are the steps in the mortgage application process?The pre-approval stage is the most important part of the whole mortgage application process. The main reason for last-minute mortgage denials is that the mortgage loan originator did not properly qualify the borrower. Unfortunately, mortgage loan officers still take the borrower’s word when qualifying income.

They will just look at the borrower’s credit scores to see if they meet the minimum credit score requirements. They will not look at the overall credit history from the credit report to make sure that there are no late payments in the past 12 months, government loans that are in collections, important dates of bankruptcy and foreclosure, and other important data that a mortgage underwriter may catch.

It is better for a loan officer to take his or her time to make sure that there are no hiccups and deal with them in the early stages than to push a file through processing and underwriting and end up with a mortgage denial. There is no reason why a pre-approved borrower cannot close if properly pre-approved.

Steps In Mortgage Application Process From Pre-Approval To Executed Contract

Alex Carlucci is an associate contributing editor of Gustan Cho Associates. Alex Carlucci is the Author of Steps In Mortgage Application Process.  Alex Carlucci is also a senior vice president of Gustan Cho Associates and a licensed mortgage loan originator. Alex and his team at Gustan Cho Associates Mortgage Group are experts in all areas of mortgage lending.

Gustan Cho Associates is nationally known for its no-lender overlays on FHA, VA, USDA, and Conventional loans.

Alex Carlucci got his federal and state mortgage loan originator’s license so he can pursue his passion for helping hard-working Americans realize their dream of homeownership a reality. Alex’s specialty in the mortgage business is originating and funding mortgage loans with no lender overlays.

Qualifying For a Mortgage With Bad Credit

The majority of lenders have overlays. Lender creates major roadblocks for borrowers who have prior credit and income issues. Gustan Cho Associates Mortgage Group knows this firsthand because over 80% of its borrowers cannot qualify at other lenders. 

We can do mortgage loans other lenders cannot do.  Alex is not just an Associate Contributing Editor for Gustan Cho Associates but is hands-on originating mortgage loans for his borrowers.

If our viewers have any questions about getting approved for a mortgage loan, please get in touch with Gustan Cho Associates, and we will get any answers you may need. We can be reached at 800-900-8569 or text us for faster response. Or email at We are available evenings, weekends, and holidays seven days a week.

Mortgage Application Process And Documents Required For Underwriting 

Whether you are applying for a home purchase or a refinance mortgage loan, you must provide a list of documents to the mortgage processor. The process needs documents from borrowers so they can process your mortgage loan application and submit it to the mortgage underwriter.

Getting the documents needed as complete as possible upfront will determine how smoothly your mortgage application process goes.

A mortgage processor can submit the borrower’s loan package with missing information. But then the underwriter will come back with conditions that will cause delays in closing your mortgage loan. The key is to get all of the documents the underwriter will need.  Processors should submit the whole package as completely as possible so there will be minimal conditions. Many mortgage processors will not submit any mortgage loan application package to underwriting, even if there are one or two missing items.

Types Of Documents Required To Process And Underwrite Loans

Divorce papers, bankruptcy paperwork, child support paperwork, and alimony paperwork not only need to be provided. Every page of the documents must be submitted, including blank pages, if it is part of the documents. For example, if you had a prior bankruptcy, you must provide the bankruptcy petition and the discharge paperwork. Submitting the discharge paperwork will not suffice, and the underwriter will return and request the filing paperwork.

List Of Documents Required To Proceed Steps In Mortgage Application Process

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Documents Required To Process Your Loan. Please provide us with the following items applicable: Two months of most recent bank statements for deposit accounts (checking/savings). We need all pages, even if they are blank. If it is a transaction history, it must be from the bank teller, and it must be signed, dated, and stamped by the teller and must be for 60 days. Two years of tax returns and W2s for salaried/hourly wage borrowers. Two years of tax returns year to date profit/loss statement, and current balance sheet for self-employed borrowers. The customer and preparer must sign page 2 of taxes if an accountant prepared them.

Misc. Paperwork Needs To Be Submitted Steps In Mortgage Application Process

We will need all pages, even if they are blank: Mortgage Note and Riders for existing mortgages on the property. We need all pages, even if they are blank. Two most recent pay stubs covering one month of pay. Copy of homeowners insurance or the insurance agent’s name, address, and phone number you will be using. Divorce decree if applicable.

Alimony agreement and child support documentation, if applicable, we need all pages, even if they are blank. 401K, Profit Sharing, or Pension Fund statements, and all pages must be even if blank. If you are using these accounts, please provide me with the terms and conditions for accounts for eligibility to withdraw funds from these accounts.

We need all investments, stocks, bonds, funds, or portfolio statement pages. Even if they are blank. Copies of Driver’s License and Social Security card or other forms of identification are needed and required. Copies of the fully executed purchase contract with all addendums needed, and if the property is a Condo or Townhome, please furnish the association name, phone number, and contact person. Copy of Social Security award letters if applicable. For more information about the contents of this blog or other topics, please get in touch with us at Gustan Cho Associates at 800-900-8569 or text us for a faster response. Or email us at

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