Understanding the Mortgage Process

Applying for a mortgage can be discouraging especially for first-time loan applicants or home buyers. To define it simply, an owner who provides a collateral or interest as security for a loan is called mortgage. However, this doesn't have to be a difficult task as long as you understand the process of applying for a mortgage. And that's what this article is all about. Here's a step-by-step guide to getting a mortgage:

  1. Pre-Qualification. This is the first step when applying for a loan. Make sure you have gathered all your documents and that all the requirements are ready. These may include the following: income statement, assets, proof of homeowner's insurance, legal description of the property, tax information and paystubs or payroll. Even if one document is not that beneficial, it would still be of great help if you can provide more proof of your financial stability than having incomplete requirements.
  2. Application. The standard procedure for this is to fill out the forms and meet with a professional mortgage lender in person. However, these days, some forms are readily available online for you to download and fill out. Completely fill out the application form and be ready to answer any questions the mortgage lender may have for you. Make sure you verify all the information you put on the form. Once you're done, set the appointment and take this opportunity to ask everything you need to know regarding the mortgage.
  3. Processing. After meeting and submitting all the requirements, your application will now be carefully reviewed and processed. Your financial status will be studied and this will be the basis for the approval of your loan. Expect a call from the mortgage lender for verifications.
  4. Underwriting. This is where your underwriter or what is also known as a financial service provider (can be your bank, insurer or investment house) reviews the picture your mortgage banker has painted for you and whether the loan makes sense. This is a crucial step because the underwriter will decide on whether your application will be approved or not.
  5. Clearing Conditions. Sometimes, additional information is needed before the underwriter comes to a decision. Be ready for this. When your mortgage banker asks for extra data, be sure to provide what they need as soon as possible. Never delay.
  6. Closing. Congratulations! You are almost done with the mortgage application process. This is the best time to review the papers that you need to sign and review all the costs and or fees that you originally discussed.

Whether you're applying for a new mortgage or are looking to make lower repayments, the qualified advisors of Rate Detective are ready to help you. They will provide you with rate comparisons of Australia's top lenders so that you can find the mortgage that's truly tailor-fit for you.

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Published on April 4-nd, 2013 in Home Loans
Damon Rasheed is the CEO of Rate Detective, an Australian financial service comparison sites specialising in Life Insurance, Income Protection Insurance and home loans. Damon holds a Master's Degree in Economics from the University of Melbourne and has been involved in many start-up internet businesses.
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