The Complete Mortgage Guide: Your Step-by-Step Journey to Homeownership

Before you start house hunting, get pre-approved for a mortgage. This involves a lender checking your credit, income, and assets to determine how much they're willing to lend you. It's like getting a financial green light that:

• Gives you a clear budget for house hunting.
• Shows real estate agents you're serious.
• Tells sellers you're backed by a lender.

This is the stronger version of pre-approval. Instead of just checking your credit and income, a lender fully underwrites your loan upfront. They verify everything: employment, income, assets, debt, and credit history. This gives you:

• Peace of mind that your financing is already done.
• A significant advantage in competitive markets because sellers know your loan won't fall through.
• Your financing risk is lower, which makes your offer more attractive.

Here's a harsh truth: your lender's "maximum approval amount" doesn't mean that's what you should borrow. Lenders qualify you based on gross income (before taxes), but you pay your mortgage with net income (after taxes).

But here's the key: your pre-approval is a ceiling, not a target. Just because a lender says you can borrow $1.2M doesn't mean you should.

Now for the fun part: house hunting! Once you find a home you love, it's time to make an offer. This is where your real estate agent will guide you through this part, but your pre-approval letter plays a starring role.

You'll also decide if your offer includes contingencies like financing or appraisal, that give you a way out if something goes sideways.

Your agent submits an offer, ideally with a strong pre-approval or underwritten letter. Once your offer is accepted, you're officially under contract!

Now that your full mortgage packet is ready, it's time to request real quotes from multiple lenders.

🛡️ Will Shopping Around Hurt My Credit? Nope. Despite what some lenders might say, FICO counts multiple mortgage inquiries made within a 45-day window as a single hit to your credit score. So get those quotes.

Underwriting is when your lender takes a magnifying glass to your financial life. They're basically the financial detective who double-checks everything to make sure you're good for the money. This is basically their way of asking: "Are you really who you say you are, and can you actually repay this loan?"

During underwriting, lenders will:

• 📌 Verify your income, employment, credit, and assets
• 📌 Review your property appraisal to make sure the home is worth what you're paying
• 📌 Confirm your debt-to-income ratio (DTI) still meets their guidelines
• 📌 May ask for updated bank statements, letters of explanation, or even clarification on Venmo activity. It's not personal. It's just how the system works.

You'll get a Closing Disclosure (CD) at least 3 business days before signing. It outlines your final interest rate, monthly payment, closing costs, and the total amount due at signing. Closing day is when you:

• Sign the final documents
• Pay your closing costs
• Get the keys to your new home

You did it. You've officially made it through the mortgage maze and into your new home. 🥳

Buying a home is one of the biggest financial decisions of your life, but it doesn't have to be overwhelming. With the right tools (and a little help from AI), Approval AI helps you focus on what really matters: finding the place you'll call home. 🏡