The FHA Mortgage Process


The Mortgage Process

Getting Started

The first step begins by getting organized and completing your mortgage pre-qualification application. Anything you can do, to prepare in advance, will reduce the stress when you find the right home and make an offer. At that stage, you�ll be able to hand over all your paperwork to your loan officer when needed. Being ready is an important step!


  • Your credit report
  • W-2�s
  • Pay stubs
  • Most recent Federal Tax return
  • 2 Months of bank and investment statements


Once a lender has gathered information about a borrower's income and debts, a determination can be made as to how much the borrower can pay for a house.





Getting pre-qualified is the initial step in the mortgage approval process, and it's generally fairly simple. You supply a bank or lender with your overall financial picture, including your debt, income and assets. After evaluating this information, a lender can give you an idea of the mortgage amount for which you qualify.


Mortgage Programs and Rates

An FHA loan is a mortgage loan that is insured by the Federal Housing Administration (FHA). Nowadays, FHA loans are very popular, especially with first-time home buyers because the requirements are less strict than conventional loans. Also, to properly analyze a mortgage program, the borrower needs to think about how long he plans to keep the loan


The Application



The Loan Estimate


The Intent to Proceed

Notice of Intent to Proceed with Loan Application (NIPLA) is a letter signed by the loan applicants to inform the Banke (or lender) of their intention to proceed with the loan application and their acceptance of the terms and fees listed in the Good Faith Estimate (GFE).


Notice of Intent to Proceed with Loan Application (NIPLA) is a letter signed by the loan applicants to inform the lender of their intention to proceed with the loan application and their acceptance of the terms and fees listed in the Good Faith Estimate (GFE).

NIPLA is prepared by the loan processing department of the lender and included with the GFE. The loan applicants review the GFE to understand the loan terms and fees. If they find terms of loan mentioned in the GFE acceptable, they will then sign NIPLA and return it back to the lender to signify their approval to ahead with the loan. With the receipt of NIPLA, the lender can move the application to the underwriting process and can charge fees from the applicants.



Loan processors gather documentation about the borrower and property, review all information in the loan file and assemble an orderly and complete package for the underwriter. They�ll open the file and get the following wheels in motion:


Required Documents

Common FHA documents include, but are not limited to, the following:

  • Loan Application

  • Form HUD-92900-A

  • SSN Verification

  • Credit Report

  • Verification of Employment

  • Tax Returns

  • Sales Contract

  • FHA Amendatory Clause

  • Real Estate Certification

  • Appraisal Report


Credit Reports

Mortgage credit reports are used for real estate loans. They are used to underwrite the original loan to buy the real estate, for refinancing the original loan, and perhaps in second mortgages or home equity situations when the loan applicant is increasing the original loan to improve the unit or to take money out of the accumulated equity in the home for some other reason.

Mortgage credit reports are generally 3 bureau credit reports with 3 credit scores where the lender is obtaining credit information on the applicant or applicants from all 3 of the national credit bureaus and credit scores based on the FICO model or the VantageScore model. The credit information can be presented to the lender in an "infile" format which is effectively as it comes from Experian, Equifax and TransUnion, but in a readable format, and without much merging or combining the credit data.

The infiles may also be merged or combined, for example the Experian credit data may be merged with Equifax credit data, which is then merged with TransUnion credit data. This is called a merged infile. When all 3 bureaus are merged, it is commonly called a 3 bureau merged infile.


Appraisal Basics

A home appraisal is an estimate of a property�s value. Mortgage lenders require an appraisal on your home before they�ll provide a loan for the simple reason that the property is the underlying asset that serves as collateral for the loan.

A home�s appraised value is based on such factors as square feet, number of bedrooms, number of bathrooms, the location and age of the property, and interior improvements. These facts about your home will be compared with other homes that the appraiser considers comparable to come up with your home�s value.



The underwriter is responsible for reviewing the entire loan package and issuing an approval.  Once again another set of eyes is reviewing all the details for compliance to all regulations and guidelines as established by Fannie/Freddie/HUD and state and national regulators. 

If questions or concerns arise the underwriter can approve the loan but make that approval subject to additional documentation.  Sometimes the loan can be approved and is �clear to close� at first look.


Closing Disclosure