Application overview

When you are buying a home, the loan application process can seem complex and endless. To make your experience as efficient and pleasant as possible, learn a little bit about what is involved before you begin. That way, there will be no unpleasant surprises down the road.

The time frame involved will depend largely on your schedule and the application processing time of your lender, but you should budget at least one month. More than likely, the loan application process will take even longer than that. Don’t feel compelled to rush; houses are expensive and your decision deserves ample consideration.

Broadly speaking, the loan application process can be divided into four steps: researching your options, obtaining pre-approval (optional), filling out the application proper, and waiting for a decision.

Researching your options will involve talking to several different lenders about potential mortgage terms. Interest rates vary from lender to lender, but there are other factors that require due consideration. In general, lenders will be able to provide you with more accurate and helpful information if you are upfront you are about your needs and finances.

Next, you may want to obtain pre-approval. This step of the loan application process is entirely optional, but it can be useful if you are in a hurry. Furthermore, it will make any seller more confident about you as a buyer, which might lead to a lower price or a better contract.

If you obtain pre-approval, the application proper will be considerably abridged. Otherwise, you will be required to provide the extensive paperwork that gives your lender information about your finances.

Finally, of course, you must wait for a decision. Processing time varies, but you can probably get a good estimate of how long it will take if you ask ahead.