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 pre-qualifying 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
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
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.