A completed "application form" by the purchaser is needed by the lender to begin the process. It is actually more helpful to complete the application process prior to executing the contract to enable the borrower to close sooner, allows the borrower to know how much house to shop for, and will make the seller and Realtors more comfortable about it being a bona fide sale. The information and required documentation are supplied by the borrower to the lender. At the same time, the lender is required to disclose all of the fees and charges attributed to the loan. After the application is submitted to the lender a Good Faith Estimate (GFE) and a Truth-in-Lending statement (TIL), which itemizes the rates and associated costs for obtaining the loan, should be given to the borrower within three days of the loan application.

Often "Pre-qualification" occurs before the loan process actually begins. In a pre-qualification, the lender gathers information about the income and debts of the borrower and makes a financial determination about how much house the borrower may be able to afford. "Pre-qualification" is different than "Pre-approval" that is approval for the loan prior to finding a property.

When the application is completed and the disclosures are given to the borrower, the lender proceeds to order a credit report, property appraisal, and requests for verifications, if necessary, for employment (VOE) and bank deposits (VOD) as well as any other documents needed for processing the loan. All information supplied by the borrower is reviewed at this time and a list of items not yet received is compiled. Usually the borrower is asked to pay for the credit report and appraisal prior to obtaining the required documentation.

After accumulating, compiling, and reviewing the loan documentation the loan is submitted to underwriting for approval.

"Underwriting" a loan means reviewing the loan for compliance with the lender's guidelines for loan-to-value, down payment, credit, and property appraisal requirements. There are written guidelines for all mortgage loans. After review the loan is sent back to the processor either approved or denied. Approved loans often have a list of additional things needed to be supplied by the borrower at or prior to closing

When all underwriting requirements are met title insurance is ordered and an appointment for closing the loan is set either with an Attorney or Title Company. The lender or the lender's agents prepare the documents to be signed by the seller and borrower. They are delivered to the Title Company or Attorney's office prior to the date of closing so that they may be reviewed by the Title Company, Attorney, or borrower before the closing date. The loan is generally "funded" on the day of closing with a check, wire, or draft in exchange for the title to the property.