The Loan Application Process Frequently Asked Questions (FAQ)

NMLS #1178604

Answers to Questions About Our Loan Application Process

First Mortgage Services is proud to serve clients in Maryland, Pennsylvania, and West Virginia for the past 20 years. We are the local lending resource with the answers you need to some of the most frequently asked questions on what it takes to apply for a loan today. 

If you have questions beyond what you see presented here, please contact us or call our office today at (301) 722-3623.

What is Mortgage Loan

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Many realtors will require eligibility for mortgage loan financing before negotiating an offer to purchase a home. First Mortgage Services offers a free pre-qualification service. The pre-qualification involves an analysis of your employment history, income, credit history, and available liquid assets that would be available for down-payment and settlement costs. An evaluation of this information determines the loan program(s) that will best meet your needs. 

First Mortgage Services reviews the advantages and disadvantages of each loan program with you, so you can make an informed decision. After completing the pre-qualification process, you will have a thorough understanding of the estimated monthly payment, settlement costs, and down-payment requirements. 

First Mortgage Services will prepare a pre-qualification letter on your behalf, which will help strengthen your offer, as the property seller will know you qualify for financing.

What are the Documentation Requirements?

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While the documentation requirements for mortgage loan financing improved recently, borrowers must provide several financial documents to complete the mortgage loan file. The amount of documentation you provide depends on your financial circumstances, the type of income you earn, and the requirements of the mortgage loan program you select. Documentation generally includes the following:

  • Most recent paystub.
  • Award letters for social security and pension benefits, if applicable.
  • W-2/1099 statements for the most recent two years.
  • Federal income tax returns for the past two years.
  • Statements for checking, savings, investment, and retirement accounts for the past two months.
  • Child support documentation, if applicable.
  • Divorce decree or property separation agreement, if applicable.

Individual circumstances may require additional documentation in addition to those listed here. First Mortgage Services will advise you on the specific documents needed for your mortgage loan file.

How Do I Apply for a Mortgage Loan?

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It is often best to begin the mortgage loan application by meeting your First Mortgage Services loan officer in person. During this meeting, First Mortgage Services will assist you in completing the mortgage loan application, review in detail the features of the mortgage loan program you select, including the monthly payment, settlement costs, and down-payment information, explain the regulatory disclosures you can expect to sign, and collect your financial documents required for your mortgage loan file.

What is Involved with Processing a Mortgage Loan?

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Once you have submitted your mortgage loan application, First Mortgage Services begins to assemble your loan file. We will order the appraisal, verify employment, income, and bank account information and any other documentation that applies to your application, and order the title examination. We compile this information along with your loan application and submit it to an underwriter for approval. After completing the underwriting process, First Mortgage Services assists in scheduling your loan settlement. The amount of time involved in the loan process from the application date through settlement is generally 30 to 45 days.

What Happens at the Loan Settlement?

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The loan settlement is normally conducted at an attorney’s office. The attorney or his/her representative will be responsible for transferring the property from the seller to you. The settlement representative will review your final loan documents with you. The time required for loan settlement is usually 45 minutes to one hour, after which you will be a happy homeowner!

Any Other Helpful Recommendations During the Application Process?

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Arrange for any inspections. If necessary, this is the perfect time to schedule the home structural inspection, termite inspection, well inspection, septic inspection, radon inspection, mold inspection, chimney inspection, and lead-based paint inspection.  Contact your loan officer to determine if any of these are a requirement of your loan program.

Arrange for homeowner’s insurance. The same insurance company where you maintain your auto insurance is a good place to start. Many insurance companies offer multi-policy discounts when customers insure both a home and vehicles through them.

Monitor your checking account. The earnest money check must clear your account by the time of settlement, and you will need to provide a paper copy of both the front and back of the cleared check and possibly a statement showing this in the transaction history.

Provide additional documentation timely. The underwriter may ask for additional information, so be sure to monitor requests and respond so as not to delay your loan process.

Do not apply for credit. Withhold from applying for any new credit or making any major purchase using credit where a creditor would have to run a credit report on you. The lender will obtain a new credit report just prior to settlement. Any new inquiries or credit obligations could cause a delay or affect your loan approval adversely.

Maintain your employment. Employment status and information is verified just prior to loan settlement.

Refrain from selling personal items. We recommend that applicants not sell personal items such as vehicles, motorcycles, collections, etc., without first notifying your lender. If you plan to use proceeds from the sale of these items for down-payment and settlement costs, then the lender will need to advise you how to best document the transaction.

Additional Links, Kits, Tips, and Calculators for Loan Process

First Mortgage Services offer the following useful links to help you no matter where you are on the loan process. We recommend the Home Loan Toolkit and identified housing counselors from Consumer Financial Protection Bureau (CFPB). 

Use the handy mortgage calculator to estimate what your monthly payment may be.

Mortgage Calculator

*Payment may not include escrow for taxes and insurance