1. Pre-Approval ? You are encouraged to get pre-approved for a mortgage even before you begin looking for a house. This way, you know ahead of time how much house you can afford and can be ready to negotiate like a cash buyer!

2. Home Search - At this point, you can begin shopping for a house. When the right one is found, the terms of the sale are negotiated, including the sale price and often the type and conditions of the loan being sought. A buyer sometimes will submit a loan pre-approval letter to the seller, which in a competitive market can tilt a sale in a buyer's favor.

3. Loan Application - It's crucial to supply the lender with as much information as possible, as accurately as possible. All outstanding debts as well as assets and income should be included.  It is strongly recommended that the application and appropriate documentation is turned in before a contract is written.  This ensures that the commitment and closing dates are met.

4. Documentation - Paperwork supporting the application also must be submitted. Information commonly sought includes pay stubs, two years? tax returns and account statements verifying the source of the down payment, funds to close and reserves.

5. Contract - Once the sale and price of the home is agreed upon, a contract is written.  It is signed by both the seller and buyer.  Please see your agent for further information.  A copy of your contract should be supplied to your mortgage specialist as soon as possible.

6. Appraisal - Lenders require an appraisal on all home sales. This step could jeopardize a deal if a big discrepancy were to exist between the sale price and appraised value of the house.

7. Processor's Review - The lender's loan processor packages all pertinent information to be sent to the lending underwriter, including any explanations that may be needed, such as reasons for derogatory credit, large bank deposits and additional documentation required for closing.  The processor will also review title, termite inspection (if applicable) and appraisal before sending the file to underwriting.

8. Underwriter's Review - Based on the information put together by both the loan representative and the processor, the underwriter makes the final decision on whether or not a loan is approved. Lenders are looking for borrowers who will make their payments on time and for property that will cover the cost of the investment if a buyer defaults.

9. Approval, denial or counter offer - In order to approve a loan, the lender may ask the borrowers to put more money down to improve the debt-to-income ratio. The borrower may also need a bigger down payment if the property appraises for less than the purchase price. In some cases, repairs or improvements on the property may be required. The lender may also have other conditions which must be met before issuing final loan approval and loan documents.  In most cases a clear to close (CTC) is issued at this point.

10. Insurance - Lenders require fire and hazard insurance on the replacement value of the structure. Flood insurance will also be required if the property is located in a flood zone. In California, some lenders require earthquake insurance on condominiums.

11. Closing - Final loan and escrow documents are signed at the closing table.  The lender sends a wire or check for the amount of the loan to the title company.