The Step-by-Step Path to Your Home Loan

Understanding the stages in getting a mortgage
Home loans
Written By:
Dawn Holden, SVP, Director of Mortgage Consumer Direct
Person carrying boxes to a home surrounded by moving boxes

If you’ve never gone through securing a home loan or if it’s been a while since you bought a home, the financing process may feel overwhelming. It’s actually a very ordered process, and your bank loan officer should keep you informed along the way.

A mortgage typically takes about 30 days to close from the time the application is submitted, but it can take longer. Be sure to tell your loan officer about all your finances to keep things moving smoothly and ensure there are no surprises. During the process, avoid making any large purchases, like new furniture or a car, as that could affect your credit score and impact the home loan.

Steps to your home loan:

1. Meet with your loan officer for pre-approval

Pre-approval is an individualized, educational step that helps you determine how much house you can afford. You will talk about loan options that fit your scenario. This can prepare you to go house hunting and make an offer on a home. It’s also an opportunity to look at your full financial picture, including your monthly income, assets and debt, and talk about your homebuying situation and goals, including your price range, the number of people on the loan and how much you feel comfortable paying each month.

Each borrower’s situation is different. A person may opt to pay off debt, save more for a down-payment, or improve their credit score before moving to the next steps. Another borrower may decide they want to keep their payments at a certain level even if they qualify for a larger loan. Use the pre-approval to determine your best route.

2. Find your dream home

Work with an agent you trust who knows your market and understands your needs and budget. Learn more about the home buying and financing process by reading our blogs, I Want to Buy a Home, Part 1, and Part 2.

3. Provide required documentation

The documents you’ll be asked to provide may depend on your employment/income situation as well as your specific loan program. Generally, employed individuals are asked to provide 30 days of pay stubs and the previous two years’ W-2 forms. If you are self-employed or on commission, you may need to provide two years of tax returns and the past two months’ bank statements.

4. Sign the loan disclosures provided by your lender

These documents convey important details about your loan, including the cost, terms, interest rate and an estimate of funds you will need to bring to the final closing. Most borrowers receive and sign documents through a secure online portal using an “e-signature,” but the disclosures can also be mailed.

5. Order your home inspection

Shop for and set up home insurance – Your bank will need to know the exact amount of your monthly insurance payment before underwriting and final signing.

6. Your bank orders the home appraisal

The appraisal is done to confirm the home’s value and ensure the loan is for the right amount. It also lets you know you are making a good investment.

7. Your bank submits documents to underwriting

Your loan application, financial information and employment history are reviewed to confirm your ability to repay the loan. You can help underwriting go smoothly by providing complete and accurate information, and responding quickly to any questions. During underwriting, it is important not to take on new debt, make major purchases or change jobs.

8. The underwriter approves the loan

Approval is generally pretty straightforward once you’ve been preapproved.

9. Final loan documents are sent to title/escrow for signing

You may be able to securely e-sign some of the documents to save time hand-signing them in an office.

10. You sign documents with the title/escrow representative and pay remaining costs, if applicable

Some documents, like the deed of trust, require a notarized signature and need to be signed in person. Closing costs are fees and charges outside of the property purchase price, such as taxes, insurance premiums, and title and record filings. You’ll be informed of any remaining fees at least three days before closing.

11. Your realtor will give you the keys to your new house at an agreed-upon time

The loan is recorded and keys are exchanged.

Welcome Home! 

At Banner, we look forward to communicating and serving you well throughout the loan process. If you decide to refinance your home down the line, rest assured that process involves fewer steps, and we’ll again be happy to walk you through each one of them.