Mortgage Document and Timeline Questions, Answered

What documents do I need to apply for a mortgage?

You usually need proof of income, assets, debts, and identity. Exact requirements vary by lender and loan program, so ask for the list early and send every page of what they request.

• Pay stubs from the last 30 days
• W-2 forms and signed federal tax returns for the last two years
• Your two most recent bank statements
• Investment or savings statements showing where your down payment comes from
• Signed gift statement, if part of the money is a gift
• Statements for outstanding debts and proof of other income
• Photo ID and Social Security number
• VA certificate of eligibility, if you are using a VA loan
• Extra income records if you are self-employed

Sources: Create a loan application packet, CFPB; Completing your loan application, My Home by Freddie Mac

How long does it take to close on a home loan?

It depends on how complete your file is, the property, your lender, and your contract, so nobody can promise a date. Federal timing rules set a floor, and the rest comes down to due diligence.

Generally, a loan cannot close until the seventh business day after the Loan Estimate is delivered or mailed. You also have to receive the Closing Disclosure at least three business days before closing. In between, the lender verifies your income, assets, debts, and credit, the home gets appraised, and the closing agent prepares the legal documents. Your contract's closing date and your rate lock period also shape the schedule, so ask your lender to walk through the timeline before you sign.

Sources: 12 CFR 1026.19, Regulation Z, CFPB; What is a Closing Disclosure? CFPB; Understanding the Homebuying Timeline, My Home by Freddie Mac; What Is Mortgage Underwriting? My Home by Freddie Mac; What can I expect in the mortgage closing process? CFPB

What is the difference between pre-qualification and a fully documented pre-approval?

The biggest difference is usually how much the lender checked. A pre-qualification is often based on what you report, while a fully documented pre-approval means the lender reviewed your paperwork.

Lenders use these words differently, so the label alone does not tell you much. Ask what was verified, including income, assets, and credit. Either way, the letter says a lender is generally willing to lend up to a set amount based on certain assumptions. Neither one is a promise of a loan. Some lenders also issue a written commitment for a set period, subject to limited conditions. Lenders may check your credit for either letter, and sellers frequently want to see one before accepting an offer.

Sources: What's the difference between a prequalification letter and a preapproval letter? CFPB; Get a preapproval letter, CFPB

What slows a mortgage down the most?

No official ranking exists, but the common slowdowns are missing paperwork and changes in your finances. Surprises on income, credit, or the appraisal can also force the lender to redo work.

Hiding negative information can delay or derail a loan, so bring it up early. Older documents have to be updated, and on conventional loans credit documents can be no more than four months old on the note date. A new loan or a missed payment can change your credit and your terms. So can overtime or bonus income the lender cannot document, or an appraisal that comes in higher or lower than expected. Those changes can bring a revised Loan Estimate, and certain late changes can restart the three-day Closing Disclosure wait.

Sources: Your home loan toolkit, CFPB; B1-1-03, Allowable Age of Credit Documents and Federal Income Tax Returns, Fannie Mae Selling Guide; Can my final mortgage costs increase from what was on my Loan Estimate? CFPB; 12 CFR 1026.19, Regulation Z, CFPB

Why does underwriting keep asking for more documents?

Underwriting keeps asking because each document has to verify your income, assets, debts, and credit, and one answer can raise a new question. Requests can also come up when paperwork gets too old.

Lenders generally must consider and verify your ability to repay, and a new item in your file may need its own proof. A large deposit may need a source. Income beyond your base pay may need more records. A missing page can lead to a repeat request, so send every page. On conventional loans, credit documents must be no more than four months old on the note date, or the lender must update them. The property appraisal adds another layer of review.

Sources: What Is Mortgage Underwriting? My Home by Freddie Mac; What is the Ability-to-Repay rule? CFPB; B3-4.2-02, Depository Accounts, Fannie Mae Selling Guide; B1-1-03, Allowable Age of Credit Documents and Federal Income Tax Returns, Fannie Mae Selling Guide; Completing your loan application, My Home by Freddie Mac

What does clear to close mean?

Clear to close means the lender has approved the necessary loan documentation so closing can be scheduled. It usually comes after the underwriter's conditions are satisfied.

It is a step in the process, not the finish line. You still need to receive your Closing Disclosure at least three business days before closing, and the loan still has to close on the terms that were approved. Lenders are expected to confirm that underwriter conditions were met and that closing documents match the approved loan. Be careful with big purchases on credit until you have closed, because new debt can make it harder to get a mortgage.

Sources: Leveraging technology to empower mortgage consumers at closing, CFPB; D1-3-02, Lender Post-Closing Quality Control Review, Fannie Mae Selling Guide; What is a Closing Disclosure? CFPB; Your home loan toolkit, CFPB

Do I need a real estate agent before I talk to a loan officer?

No, you can talk to a loan officer before you have a real estate agent. Federal consumer guidance encourages exploring your loan options before you find a house.

Starting early can show you what you may qualify for and flag problems while you still have time to fix them. It matters because you may have only a couple of days to arrange financing after a seller accepts your offer, and sellers frequently want a pre-approval letter first. Either person can refer you to the other, but you should still shop around, since builders and agents may recommend lenders. Agents and loan officers both earn money based on your decisions, so ask whether what you hear makes sense for you.

Sources: Contact multiple lenders, CFPB; Get a preapproval letter, CFPB; Build a network of advisors, CFPB

How long is a pre-approval good for?

There is no single federal time limit, because each lender sets its own expiration date. According to the CFPB, pre-approval letters typically carry an expiration date of 30 to 60 days.

Check the date on your letter, and ask what it takes to renew it. Your underlying paperwork also has its own shelf life. On conventional loans, credit documents can be no more than four months old on the note date, and other programs may differ. A letter is based on assumptions, so changes in your income, debts, or credit can affect it even before it expires. A written commitment letter, if a lender issues one, is valid for its own stated period.

Sources: Get a preapproval letter, CFPB; B1-1-03, Allowable Age of Credit Documents and Federal Income Tax Returns, Fannie Mae Selling Guide; What's the difference between a prequalification letter and a preapproval letter? CFPB