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Understanding the Mortgage Approval Process

By: Elite Legacy Education, November 13, 2017

According to Ruby Homes, there are 6 steps to getting a mortgage – from pre-approval all the way to closing the deal. Let’s dive right in – starting with Step #1.


Step 1: Get pre-approved for a loan


Since the collapse of the housing market, most real estate agents require that you get pre-approved for a mortgage before shopping for a house. This shows them that you are eligible for financing and able to purchase the home. It basically provides that you are a legitimate buyer (your earnest money deposit helps with that too, of course – link to past article).


Please note that you may come across the term, pre-qualification. When it comes to getting a mortgage, this is not as strong evidence as getting pre-approved. With pre-qualification, it’s a very quick (not very in-depth or thorough) check to see if you’re eligible. On the other hand, pre-approval requires the lender to submit a credit inquiry on your behalf. This provides basic information from your credit history to help assess your eligibility.


Step 2: Find a property and make an offer


Now it’s time to get out there and start searching for a property. Take advantage of online real estate marketplaces like Zillow. You may also enlist a real estate agent to help search for properties and negotiate on your behalf.


Once you find the one, you’ll want to make an offer on the property. Your real estate agent can help structure the deal and explain all of the required conditions before the deal goes through. According to Ruby Homes, “Here are a few common ones:


  • Appraisal must come in close to the loan amount, not lower
  • Home inspection does not find issues with property
  • Borrower is approved for loan”


And don’t forget about your earnest money deposit to show you are a serious buyer.


Step 3: Apply for mortgage and receive loan estimate


Now you will want to go ahead and actually apply for the final mortgage approval. You will need to provide a list of documents covering your employment, income, assets, debts, property information, financial blemishes, type of mortgage and more. Once you submit this information, you’ll receive a loan estimate within 3 business days.


Step 4: Application processing stage


The loan will start to be processed. This is when all the information you’ve submitted is verified. Any relevant references will be contacted and your credit history will be checked. Assuming everything lines up, you can move on to Step 5.


Step 5: Underwriting the mortgage loan


This is the key decision point to decide whether you are approved or denied for the mortgage. The underwriter carefully evaluates all of the documentation you’ve submitted and makes a decision.


At this stage, you will also lock in your interest rate. But first, you’ll need to get yourself title insurance before the final closing stage.


Step 6: Closing process


This is where it all comes together and you finally receive approval for your mortgage – which means you can close the deal! There are several steps to review the final agreement before the signatures are finally signed.




There's never a shortage of money looking to back a great deal. It's simply knowing where to find it. By attending an Elite Legacy Education event, you will be introduced to a variety of funding sources and our Elite Legacy Education speakers will demonstrate which sources fit different types of real estate investments.

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