The Home Loan Application Process

Mortgage 101
The home loan application process from start to finish. Follow along with our step-by-step guide to get your mortgage approval faster and easier than ever.
Published on
July 27, 2023
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The home-buying process is a big one. It can be time-consuming and costly, so it's important to research your options and understand how the mortgage application process works. The steps listed below will help you understand what happens when you apply for a home loan and what to expect if your application is approved.

Gather the Required Documents

To apply for a home loan, you need to prepare the following documents:

  • Identification - Passport, driver's license, national ID card etc.
  • Income- Proof of monthly income (last 3 months), salary slips and TDS certificates if applicable.
  • Employment History
  • Assets- Proof of fixed deposits, mutual funds’ investments, and certificates of deposits (if any).
  • Credit Reports
  • Social Security Number
  • Current and Previous Addresses

Generally, banks offer 80% LTV on home loans, but this may differ from bank to bank depending on your personal profile as well as other eligibility conditions such as whether you are buying an existing house/apartment or constructing one from scratch.

Research Current Mortgage Rates

This is the best way to find the lowest mortgage rates online. You'll be able to view multiple lenders' offers and compare them side by side. This can help you get a clear picture of your options and choose which lender has the most attractive deal for you.

Submit a Formal Application

You can apply for your home loan in several different ways. You may be able to apply online or in person, depending on the lender that you choose to work with.

In addition to applying, you will likely need to provide references and documentation referenced above to support the information provided in your application.

What is Next?

The automated underwriting system is used to evaluate the applicant's credit history, assets, and income. The system provides a preliminary score of the applicant's creditworthiness. The automated underwriting system also determines the loan terms, such as whether you will be approved for a fixed or adjustable-rate loan, what type of mortgage insurance you must pay (if any), how much down payment is required and if there are any special conditions that apply to your loan.

The automated underwriting system uses information from several sources to generate these preliminary results:

  • Credit report - This can include your current and previous history with lenders, whether you have been late on payments or if any accounts were sent to collections agencies or charged off by creditors
  • Assets - An applicant's savings may help determine if they have enough money for closing costs when buying a home

A credit score is a three-digit number that represents a consumer's ability to pay back a loan. It's calculated based on information in your credit report, which includes things like the amounts of money you owe to creditors, how long you've been opening accounts and whether there have been any late payments on those accounts.

The higher your score, the more likely it is that lenders will approve your application for a mortgage loan with favorable interest rates and terms.

If your score is below 620, according to FICO (the company behind most credit scoring models), then it could be difficult but not impossible for you to get approved for home financing.

Close on The Loan And a Home!

The next step in the home loan process is closing on your new house. This happens when you and your lender sign off on all the paperwork, including a final loan document called a "closing statement."

The closing statement shows you how much money you owe and what it was used for—for example, if some of the funds were used to pay taxes or fees at closing. You'll also receive copies of your mortgage note and mortgage assignment (a document that transfers ownership).

If your loan is approved but not closed by this time, we'll notify you as soon as possible so that you can take action to ensure that it closes before the deadline passes.

Taking out a home loan can be complicated and time-consuming, so it's better to prepare in advance
  • Prepare your documents
  • Provide all documentation requested by the lender on time and to streamline the process.
  • Create an organized system for keeping track of deadlines, documents required, etc. This will help you stay on top of things and make sure nothing falls through the cracks.
  • Make sure you have enough money for closing costs
  • Find out the fees associated with getting a home loan

We hope this article has helped you understand the home loan application process. If you have any questions, feel free to contact us at

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