What Does the Mortgage Approval Process Look Like?

The mortgage approval process generally consists of six main stages:

  • Pre-Approval. A lender will make a commitment regarding the size of the mortgage loan they are willing to offer.

  • House Hunting and Offer. During this time, you should work with your real estate agent to find the right home for you. Once you make an offer on a house, you should begin your mortgage application.

  • Mortgage Application. You should complete the mortgage application by filling out and submitting a standardized form called Uniform Residential Loan Application (URLA), also known as Fannie Mae Form 1003.

  • Mortgage Processing. Mortgage processors will collect a variety of documents relating to you and your finances, such as bank statements, tax records, employment letters, an appraisal report, and the purchase agreement for the property you wish to buy. The processor will review the files to ensure your application contains all of the documents needed for the underwriting process.

  • Mortgage Underwriting. The underwriter is the primary decision-maker in the mortgage approval process. They examine the borrower's records, ensure compliance with lending requirements, and assess the risks of the mortgage.

  • Approval and Closing. The length of the mortgage approval process varies. When lenders are processing a high volume of applications, the mortgage approval process may take as long as 60 days. If the lender discovers any financial issues in your record (e.g., a low credit score, previous foreclosure, or overwhelming debt), the approval process can be delayed.

Tellus TIP:

If your goal is to get an approval as soon as possible, gather required documents in advance.