Understanding The Mortgage Application Process

You have been going to open houses for months now, and you finally found it − the perfect house. Great news soon follows when your offer is accepted. Now you are eager to buy the home, move in and get settled. But, you have one big task ahead of you − getting a mortgage loan.

We know that for many people, buying a house could be the most confusing, stressful and exciting financial transaction they will ever undertake. Even for people who have bought several homes, the mortgage process may still be somewhat intimidating. However, it can be broken down into several easy-to-follow steps that can help to make the process less overwhelming. If you understand these steps, much of the stress may be avoided. The four basic steps are: application, processing, approval and closing.

As the homebuyer, the first step is that you must complete a loan application to initiate the mortgage process. During this phase, depending on the type of loan product you choose, you will provide documentation on such things as current income, bank accounts and long-term debt (credit cards, car loans, child support, etc.). Some lenders may then also require an application fee.

Once the application is complete the lender

can begin the second step of the process which is processing and reviewing your information. An appraisal of the home and a credit report are requested. Employment and assets are also verified. The lender will then provide you with specific loan information including an estimate of your closing costs.

During the third step or approval phase, the lender evaluates the application, along with supporting documentation and approves a loan amount.

After a loan is approved, the homebuyer meets with the seller, real estate agent or an attorney to finalize the transaction and sign any necessary paperwork. This is commonly known as the closing, the fourth and final step of the process. The lender disburses the funds to the settlement or closing agent and the title is transferred to you − the buyer. Finally, appropriate documents are recorded at the county recorder’s office.

A tip worth noting: you can make the mortgage application process go even more smoothly if you prepare ahead of time. Your lender is going to ask for a lot of information about your personal finances, including bank account numbers and balances and any outstanding debt such as credit card or car payments. It is important that all of this

information is complete and accurate so your mortgage application can be verified and the loan approved as quickly as possible. It is to your benefit to gather all of this information before meeting with a lender.

For more information about buying a home, call Jack Little with Wells Fargo Home Mortgage at 866-982-0198.

Celebrating its centennial year, Wells Fargo Home Mortgage is the nation’s leading retail mortgage lender* and a leading servicer of home mortgages. As a division of Wells Fargo Bank, N.A., it has a local presence in more than 2,400 mortgage stores and bank branches, plus the capabilities to serve the home financing needs of customers nationwide through its call centers, Internet presence and wholesale lending operations. Wells Fargo Home Mortgage services loans for approximately 5.7 million customers in all 50 states from its base of operations in Des Moines, Iowa.

*Based on yearend 2005 statistics by Inside Mortgage Finance – Feb. 17, 2006. This information is accurate as of date of printing and is subject to change without notice. Wells Fargo Home Mortgage is a division of Wells Fargo Bank, N.A. © 2006 Wells Fargo Bank, N.A. All rights reserved. #40670 9/06-12/06.