What the Mortgage Application Journey Actually Looks Like

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Key Takeaways

• Mortgage applications typically progress from a soft credit check to prequalification, preapproval, underwriting, appraisal and closing, and many borrowers now complete the process online.

• An online application often takes 10 to 15 minutes, though features such as bank linking and automatic document retrieval depend on the lender.

• Missing paperwork is the most common obstacle, according to Veterans United's Katie Rose. Borrowers should have pay stubs, W-2s, two years of tax returns and bank statements ready.

For many homebuyers, the mortgage application can seem intimidating, particularly if it is your first time borrowing. Even so, the process is much simpler than it used to be, when applicants had to make copies and carry around stacks of paperwork.

You will still need to provide plenty of documentation, from income records to credit information, but most applications can now be finished online in just a few minutes, especially with a lender that walks you through each step.

No two mortgages are exactly alike, and the application process can vary as well. Here is a look at what typically happens when you apply, and how the experience can differ from one lender or loan type to another.

How the mortgage application process works

The standard mortgage application process is generally straightforward. It begins when you click an apply button, submit a lead, and enter basic details such as whether you are seeking a purchase or refinance loan, your name, location, Social Security number and income.

With that information, the lender usually performs a soft credit check and gives you a preliminary loan estimate based on the details provided. At some point in the process, which can vary by lender, you may be asked to create an account on the lender's loan portal. That secure portal is where you can upload the documents needed if you decide to move forward.

You will then need to submit the required paperwork, including recent pay stubs, W-2s, tax returns from the past two years and bank statements. Your lender will give you the full list of documents needed to complete the application.

After the paperwork is in, the lender reviews everything and may issue a preapproval letter, which gives a more precise borrowing estimate than prequalification.

An underwriter then checks the information you provided and makes sure the file meets loan requirements. If everything lines up, the lender will usually order an appraisal to determine the home's value and then move the loan toward closing. At that stage, you finalize the loan documents and pay any closing costs.

The process can become more complicated with a government-backed loan such as an FHA loan, and even more so with a specialized loan such as a VA mortgage, which comes with additional service and documentation rules. It can be especially complex for borrowers stationed overseas or facing a new duty assignment.

Most lenders now allow borrowers to complete the mortgage application online, which is the preferred option for many buyers, according to Katie Rose, NMLS 860643, a senior loan officer with Veterans United.

"Most people like to do [the application] online because they don't have to leave their house or they're active duty and it's difficult to go into a facility," Rose says.

How applications vary across lenders

A mortgage application serves two main purposes: confirming who you and any co-borrower are, and showing that you can afford the mortgage payment over time.

As a result, every application asks for information about your employment, income, assets, debts and credit. It also requests details about the price range you are considering, or the property you have already chosen, along with personal information such as your name, Social Security number and contact details.

Still, not every application works the same way. Rose says the core information is largely consistent from lender to lender; what changes most is the technology built into the application.

"Some tools can link bank accounts and pull statements automatically, or upload documents right from your phone, so you're not chasing down paperwork on your own," Rose says. "Specialized lenders can often go a step further too. For military borrowers, that might mean verifying service-related eligibility automatically instead of tracking down paperwork yourself."

Money reviewed the application processes of four national lenders: loanDepot, Veterans United Home Loans, Churchill Mortgage and Georgia's Own Credit Union. Here is how each one works.

loanDepot

The loanDepot application is a streamlined seven-step process that asks for personal information, property details, financial assets and other standard items found in many mortgage applications. It also includes secure bank linking, which allows the lender to pull bank and asset statements automatically instead of requiring borrowers to scan and upload them manually.

The most distinctive part of loanDepot's process comes at the end. Rather than simply entering information and submitting it, borrowers are shown a grid of "loan offers" that outline the loans, terms, monthly payments and interest rates available based on the information they entered. They can then choose the option that best fits their needs.

For veteran and military applicants, loanDepot also asks additional questions about military service and can retrieve a Certificate of Eligibility, or COE, directly from the VA.

Veterans United

Veterans United is a mortgage lender that focuses on VA loans, which are backed by the U.S. Department of Veterans Affairs. Because of that, its application process is naturally tailored to military borrowers.

The lender has designed its application to make the process faster and easier. Applicants provide information about pay, rank, years of service, branch, Permanent Change of Station orders and Expiration Term of Service dates.

Automation is what makes the process stand out. Borrowers can connect their myPay account directly to the Veterans United myVU app, giving the lender access to Leave and Earnings Statements and bank statements within minutes rather than waiting for uploads. The lender also retrieves the applicant's Certificate of Eligibility directly from the VA, something that can take several days with a non-VA lender.

After an application is submitted, a Veterans United loan officer typically reaches out within a few hours to help finalize the plan.

Overall, the application is quick and simple. It can be completed fully online, although phone help is available if needed. The process took about 15 minutes, and a preapproval decision could come in as little as 12 minutes.

Churchill Mortgage

Churchill Mortgage also offers a fast, streamlined online application. It takes about 15 minutes to complete, or a little longer if you add a spouse or co-borrower, and asks for similar details about housing history, personal information, property information, work history and more. Based on the information you provide, you work with a loan specialist to review your options, which may include conventional, FHA and VA loans.

One notable feature of Churchill's process is the personal dashboard that appears after submission. There, borrowers can review remaining tasks, run payment estimates, connect bank accounts, upload documents and monitor the status of the application.

VA loan process

If you are applying for a VA loan, you will note your military service in the application and then enter the branch you served in and the length of service. That helps the loan officer identify whether a VA loan may be suitable for the purchase. If you choose a VA loan, you will be asked for additional information. The application also asks whether you are a first-time homebuyer or whether you have completed a homebuyer education course, since those answers can affect loan options and pricing, according to a Churchill representative.

Georgia's Own Credit Union

Georgia's Own Credit Union offers a streamlined application for all of its loan products, though this review focused on its FHA process. If you have your documents ready, the application takes about 10 to 15 minutes to complete.

The initial application begins on the credit union's website with four basic questions: whether you want to buy a home or refinance, your current debts, your gross monthly income and the state where you live.

You are then asked whether you are a first-time or repeat buyer, the property's address and ZIP code, the home type, the number of units, the purchase price and the down payment. From that information, you receive an early estimate of your loan amount.

After answering a few more questions about your credit score, military service, how long you plan to stay in the home and whether it will be your primary residence, you are shown loan estimates for both 30-year and 15-year FHA loans. You can also view estimated closing costs and see how the estimate changes if you choose to buy points to reduce the quoted rate.

If you want to proceed with one of the options, you click to begin the full application. You will need to create an account with the credit union, where you can securely upload required documents such as pay stubs, W-2s and bank statements, and track the loan. After submission, a loan officer will contact you within a day to discuss the next steps, including underwriting and scheduling an appraisal.

Common hurdles and how to make your mortgage application go more smoothly

While applications may differ slightly from lender to lender, mortgage professionals say several common problems show up again and again.

Paperwork is the biggest one. No matter which lender you use, mortgage applications require significant documentation to verify your information. You will need tax returns, bank statements, pay stubs, investment account statements, retirement account statements and more. If you have not gathered and organized these documents before applying, the process can stall and underwriting may be delayed. Depending on market conditions, you could even miss out on a lower rate.

"Documents seem to be the biggest hiccup," Rose says. "If everybody's got their documentation ready, it makes for smooth sailing."

You do not necessarily need paper copies of everything. Digital files can work, but make sure you can access them easily before starting the application.

"Know how to log into the various things. Your bank account or the payroll service that your employer uses, for example," says Chris DeRuischer, home loan specialist at Churchill. "Can you log in and get a copy of your 401(k) statement? It might not all be requested, but just knowing the log-ins and having all of that organized is very helpful."

Frozen credit is another frequent issue. Lenders almost always need to pull credit to confirm debts and evaluate payment history. If your credit is frozen as a protection against identity theft or fraudulent charges, the application may come to a stop.

"It’s a pretty popular thing to do," DeRuischer says. "If you have your credit frozen, you will need to go on the app with each of the bureaus, unfreeze your credit score, thaw those, and then we'll be able to pull the credit report after that."

DeRuischer recommends keeping credit unfrozen for at least 30 days, since most lenders will need to check it again shortly before closing. That extra review helps confirm that nothing major has changed in your debts or payment history since you applied.

Ray Hicks, a home loan specialist at Churchill Mortgage, also says that getting stuck on small details can slow an application down. While applicants should always enter information as accurately as possible, a few minor errors will not necessarily derail the mortgage.

"What I tell my clients when filling out their application is to do their best," Hicks says. "They aren’t going to mess anything up. Of course, put in your correct personal info, but anything past that, if there’s an error, we’ll get it corrected on our end."