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Home / Loans / How To Get Your Home Loan Fully Approved


In the first part of this series, ”How To Get Pre-Approved For a House”, we covered the early steps of the mortgage process and gave you a few tips to help you get pre-approved, making it easier to buy the house of your dreams. In this part, we are going to cover the process of finalizing your mortgage.

Once you have completed the pre-approval process, you will be given a set of instructions from your loan representative. This will include a list of documents that are needed to support your income and debt figures. These will all be submitted to the underwriter, who will then issue one of four decision: approval, approved with conditions, suspended (this happens when more documentation is required), or denied. In general, even an approved application will have a few conditions attached. Satisfying all conditions is the first critical task that you must accomplish toward final approval. The second is locking in your interest rate and loan terms.

Satisfy the Checklist of Conditions

This list is the single biggest obstacle between you and your dream home. It will often include a laundry list of requests for alternative and/or supplementary documentation, explanations or corrections of credit report anomalies, verifications, and attestations. This phase can become monotonous and frustrating, but take care to find and submit each piece of paper requested, even when it is requested more than once. You will want to see the lender’s Specific Closing Instruction list. It spells out everything the closing agent must do to complete the transaction. If you miss a single item or fail to comply in a timely fashion, your loan will not be funded.

The Specific Closing Instruction list usually includes requests for:

Alternative and Supplementary Documentation

  • If you do not have a long credit history, an underwriter may want to see bills from service accounts: utilities, cable, or telephone.
  • If you are self-employed, you may be asked to submit profit and loss statements that were prepared by a licensed accountant.
  • You will be required to show updated account statements at closing.

Explanation and Correction of Anomalies

  • You will need to explain or correct some items on your credit reports.
  • Explanation of wages, tax statements, pay stubs, etc. may be needed from the payroll departments at previous and current employers or the proper authorities.
  • You may be asked for verifications of: employment and income, housing or rental history, gift funds, or verification of debt forgiveness.

Lock in the Interest Rate and Loan Terms

When you lock in your interest rate and loan terms, your loan is set in stone. A lock-in protects you from interest rate fluctuations during the approval process. You should only try to do this after the appraisal report has been submitted to your lender.

You can start by getting the lender’s current rate sheet and comparing it to the one you should have been given during the pre-approval process. This helps you understand what has happened on the market  recently. You should see several fee-rate options. You will see the lock rates for 15, 30, and 45 day lock periods. You can lock your rate and fees as long as you manage to close within those time periods. Why is locking important to you?

Let’s say you have a chance to lock at 6 percent and one point, but choose to play the waiting game for another 15 days. Should the market move in the wrong direction, you may find the best rate to be 6.5 percent and one point. That means your mortgage is going cost you an additional $500 per year for every $100,000 you need to borrow. What if the underwriter feels that the additional $500 is too much for your income?

When you do lock, you must get a copy of the lock confirmation. The lock confirmation is not automatically sent to a borrower, but it is your only means of verifying each individual source of an origination fee, borrower names, loan terms, the interest rate, and the date and length of lock. Without the lock confirmation you can not verify that your loan representative has honored the lock or even prove that a lock agreement exists.


About the author: Jerry Coffey


Jerry Coffey spent many years in a debt-riddled gray area somewhere between broke and desperately broke. His seemingly endless need for more and more cash led him to payday loans, repossessions, bankruptcy, and depression. After years of the same financial style, he heard a piece of advice that inspired him to find a way to change. The advice: ''The very definition of a fool is someone who continues to do the same things, but expects different results.'' This led him to a much more frugal lifestyle that sees all of his bills paid on time and a growing savings account. Even the seed of a retirement account has begun to sprout.


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