The 8 Steps of the Mortgage Application Process
- Daniel Kurt
- Dec 19, 2025
- 5 min read
Updated: Mar 26
Main takeaways
Getting pre-approved before you start house hunting will show sellers that you’re serious and help you understand what you can afford.
Compare loan offers from multiple lenders to make sure you’re getting the best rate and lowest closing costs for your situation.
Don’t skip the home inspection—it can uncover costly issues before you commit to the purchase.
Be ready for underwriting and closing by keeping your finances stable and responding quickly to lender requests.
Buying your first home is a major life milestone, to be sure. But mixed in with the excitement of the experience can be more than a little trepidation—not least about how to get that all-important mortgage.
Knowing what to expect ahead of time can not only make the home loan process a whole lot smoother, but help calm your nerves along the way. Here are the major steps you can expect as you obtain financing.
1. Get pre-approved
Before looking up property listings in your search area, you’ll want to get pre-approved by at least one lender. It can be from a traditional bank, a credit union or an online mortgage company like Rocket Mortgage or SoFi. They’ll pull your credit report and gather information about your income and assets to determine how much home you can afford.
The pre-approval, which states how much the lender is willing to lend you, is critical because it shows sellers that you can actually afford the home you’ve put an offer on. If they’re getting multiple offers—which is definitely more than likely these days—they’re not likely to take a chance on a prospective buyer that may or may not be able to secure adequate financing.
These days, most lenders can do all or most of the pre-approval their website or app. To make the process go faster, you’ll want to first check your credit report with the three major bureaus and dispute any information that’s incorrect. You’ll also want to gather the last two paystubs for each applicant, as well as your last two federal income tax returns. You should also have a copy of your latest bank and investment account statements ready to go, which helps the lender verify your assets.
2. Shop for your home and make an offer
Another benefit of the pre-approval letter: It gives you a clearer idea how much home you can afford so you don’t waste your time looking for homes that are outside your price range. Of course, you don’t have to borrow the maximum amount for which you’re pre-qualified (and in many cases, you wouldn’t want to). But it gives you a general idea what your upper limit should be when starting your search.
Once you find a home that feels like “the one,” your real estate agent can help you draft an offer—including any contingency requirements you want to include. You likely need to kick in “earnest money” – typically 1%-3% of the sale price—so the seller’s confident enough to delist the property (fortunately, this amount is included in your down payment, if you manage to complete the purchase). If they accept the price and conditions you put on the table, you’re one giant step closer to home ownership.
3. Choose your lender
In order to make sure you’re getting the best financing deal, you want to compare loan offers from at least three lenders. Keep in mind that you don’t have to stick with the lender who provided your pre-approval. Only by comparison-shopping are you going to be confident that you got the best terms possible.
Each lender you apply with will send you a three-page Loan Estimate, which helps you size up the different offers. You see the loan amount along with the interest rate and total interest amount over the life of the loan. The document also shows how much you’ll have to pay in various closing costs, which can be just as important as the interest rate.
In addition to finding the right lender, the type of loan can make a huge difference when shopping for a mortgage. Depending on your financial situation and where you buy your home, you may be eligible for a conventional, FHA or USDA loan. If you served in the Armed Forces, you might qualify for a VA loan as well. You want to consider factors specific to the loan program, such as the need to pay mortgage insurance and the down payment requirement.
4. Order a home inspection
In an uber-tight real estate market, you may have to forgo certain buyer protections to have a realistic chance of winning the bid. But, generally speaking, it’s an excellent idea to make your offer contingent on a home inspection. After all, a hidden problem with the foundation or a mold issue lurking behind the walls can turn your home ownership dream into a nightmare.
If you included an inspection contingency in your bid, you’ll want to order one as soon as possible after the seller accepts your offer. If you give yourself plenty of time between the inspection and the closing date, you can negotiate with the seller to handle some or all of the main issues that come up.
5. Line up homeowner’s insurance
Whether its damage from a violent storm or stolen personal property from a break-in, homeowners insurance can help prevent a financial disaster after a crisis. Plus, your lender is going to require coverage to protect its investment in your property. So once you have an accepted offer, it’s time to shop around for rates from multiple carriers with a strong financial rating.
6. Lender performs underwriting
Getting a pre-approval letter before you started house-hunting isn’t the same as a formal loan commitment. Once you have an accepted offer, the lender is going to go through a process called underwriting, where they make sure you meet all of the loan program guidelines. The lender will likely ask for the latest copies of your paystubs and financial statements to make sure everything’s in order—and that you didn’t make a large purchase on credit since starting the loan process.
The mortgage originator will set up a home appraisal at this time to make sure the home’s purchase price reflects its actual market value. It will also order a title search to ensure no one has an outstanding lien against the property—whether it’s a tax bill or an unpaid contractor’s invoice—that would fall to you as the new owner. The underwriting process can take a few weeks, depending on the lender, although you can help prevent delays by responding to any questions or document requests as quickly as possible.
7. Get ready for your closing
Once the lender wraps up the underwriting process, they’ll send you a closing disclosure that shows you the official amounts for the down payment as well as any other closing costs you’ll need to pay. Typically, you can either mail a cashier’s check or wire funds to the appropriate escrow account. Having the necessary funds on hand and sending them on time helps ensure that the transaction goes through without a hitch. If possible, you’ll also want to complete a final walk-through of the property 24 to 48 hours before closing to confirm that the home is in the agreed-upon condition and that any repairs negotiated during the sale have been completed.
8. Close on your home
The closing process on a home loan involves finalizing all necessary paperwork, signing documents and transferring funds to complete the purchase. Once the documents are signed and funds are disbursed, you officially become the owner of the property.
The upshot
Buying your first home can feel overwhelming, but understanding the mortgage process can help you stay in control from pre-approval to closing day. With the right preparation and a little patience, you’ll be able to navigate the journey confidently—and enjoy the moment when you finally get the keys in hand.
