Before you start looking for a home, it's important to meet with a loan officer to find out how much you can borrow. The loan officer will look at your financial information and credit history and establish how much you qualify for or can afford to pay for a home. She or he will help determine your estimated monthly payments and closing costs and will prepare an approval letter that shows sellers you are a qualified buyer. You will need a copy of this letter when you make an offer on a home.  

After you find a home you you want to buy, you will meet with your loan officer once again and complete a loan application. Once your application is complete, they will review the file to make sure all of the required documents and information are included and accurate. Typically, the load officer will:

• Verify the information by contacting financial institutions listed on your application and employers to confirm that all of the information provided is complete and accurate.
  
• Obtain a credit report from a reliable reporting agency that outlines how you've handled payment of debts such as credit cards, auto loans, school loans, etc. in the past.
  
• If a house is already found, arrangements for an appraisal will be made. If you've applied for a loan before house hunting, this process will be completed as soon as you've identified a property.
  

It's possible that the officer might need some additional information, too. If this is the case, he or she will contact you. Your prompt response will help keep the processing time to a minimum.

After all of the documentation is received, the loan officer will forward your completed file to an underwriter. The underwriter will analyze all of the information in your file using industry accepted guidelines to determine whether you can reasonably be expected to repay the loan amount requested and whether the property you have chosen provides adequate security for a loan. As soon as your loan is approved, you and/or your real estate agent will be contacted by phone with the details, including the interest rate, term and monthly payments.

Once the loan is approved, your real estate agent or the loan officer will contact you to set a convenient time and location to close on your new home. You will be provided with a list of items which you will need to bring with you to the closing. Usually, these items include:

• Proof of homeowners insurance in the form of the policy or an insurance binder and a paid receipt for the first year's premium.
• A cashier's or certified check made payable to you for the amount of the down payment and closing costs. This amount should be very close to the estimate given on the "Good Faith Estimate" provided when you applied for the loan.
• Your personal checkbook to cover any extra charges, if necessary.
• A photo ID.
• A list of addresses for the past 10 years.

Several people will probably attend the closing, including you, your real estate agent, the seller, the seller's real estate agent, attorney(s) representing you and/or the seller, and a closing representative.

During the meeting, which usually takes about an hour, you and the seller will review and sign all of the necessary paperwork. Some of the documents presented at closing are:

• Mortgage Note
  This states that you, the buyer, will pay back the entire loan amount to the lender plus interest at the note rate.
  
• Mortgage or Deed of Trust
  This pledges the real property being purchased as security for the debt.
  
• Loan Settlement Statement (HUD-1)
  This provides a breakdown of all the costs that must be paid by you and the seller. (required by Federal Law)
  
• Truth-In-Housing Disclosure
  This provides important information about the loan, including the annual percentage rate. (required by Federal Law)
  

At the end of the meeting, the home will be legally transferred from the seller to you.

Congratulations -- you're a homeowner!