Traditional Loan Process

You've found the mortgage you want and you're ready for the next step - the loan application. The process costs anywhere from $100 to $500 and is usually non-refundable. Lenders levy the fee to cover the costs of running credit reports and filling out mortgage-insurance applications.

What to expect

• You will need raw material, and lots of it, for the application: income and balance-sheet figures and evidence, copies of past income-tax returns and the title to your car. Take the paperwork you gathered during the prequalifying process with you.
• Be prepared to provide the name and phone number of someone who can verify your financial information - most likely your employer's personnel office. If you have substantial non-salary income from investments, you'll be asked to substantiate this through an accountant, stockbroker, trust officer or similar source.
• Application forms are usually filled out during the interview with the help of a loan officer, but you could fill them out at home and return them.
• In addition to the application fee, you may be asked to pay a "loan origination fee" or "prepaid point" - typically 1 percent of the loan amount - when you apply, before approval is made.
• Find out what will happen to your origination fee if the lender decides not to approve your loan. Will the 1 percent origination fee be refunded? Get the answer in writing before you pay.

From the time you submit the completed loan application - and appraisal and credit reports are received - the lender has up to 30 days to approve or reject your request and inform you of the decision. Make sure you haven't been forgotten. During the process, remind the loan officer of your settlement date and check on the progress.

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