Bank employee lending out cashFor those who are ready to buy a home, the mortgage application process can seem intimidating. There are a few steps to the application process and several options for applying, depending on the type of mortgage a consumer wants. Even though requirements and qualifications for a loan may be similar, they can differ from year to year based on the changes in the tax code.

 Understanding the mortgage market

It hasn’t been too long since the housing market crash and recession in the US. Even though the economy is doing well and the housing market looks right, it is not as easy to apply for a mortgage in Clarksville or any other state as compared to the pre-recession years. Knowing how to navigate the application process will make it easier for applicants to get a loan.

Steps in the mortgage application process

There are some steps in the preparation process and to ensure that the application is approved. 

Financial preparation

Lenders want to look at income sources, job and credit histories. For those who are self-employed, copies of two or three years’ worth of tax returns will help to indicate earning ability. Lenders look for debt to income ratios that are lower than 40-45%.


This step is crucial for the applicant. They have to decide how much budget they have for this purchase. A rule of thumb is to keep housing expenses at 35% of gross income or lower. Other home-related costs like insurance and homeowner association fees will all add up to make the bill a large one. Lender websites usually have calculators which are helpful in figuring out loan numbers. 

Down payment

This amount plays a crucial role in determining interest rates. Down payment amounts also vary based on the type of mortgage one applies for. It is possible to buy a home without a down payment, but other costs will be much higher. A 20% payment is ideal for getting a reasonable interest rate.

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 Finding lenders

There are a lot of options as far as mortgage lenders. It is essential that a borrower does his homework and compares available options. Information is readily available online, and there is no need to use your credit rating information. Check out different lenders and the types of loans they offer.

Pay close attention to the costs associated with the loan. Once you have chosen a lender, they should get the paperwork organized. The underwriter evaluates all the documents and then approves the loan. The applicant sits down with the lender and reviews the loan terms and closing costs. During the closing, a lot of documents have to be considered before signing. Once done, the loan is made available to the customer.