1. Prequalification
Tentatively approves the homebuyer for a certain size loan pending credit checks, etc. You know how much you can spend while shopping for a home or negotiating a price on one you have already found.

2. Application or initial interview (consumer safeguards)

• Truth-in-Lending: provides APR
• RESPA: provides known and estimated closing costs
• 3. 30 - 60 days to approve or reject the application
• Income/employment check: Letter to employer
• Income guidelines: Check housing expenses, long-term debt

4. Credit Check
Credit History, Type of Credit, Attitude towards credit, Lapses in payment

5. Fair Credit Reporting Act and ECOA
Ensure fair credit-gathering practices. Prohibits discrimination in lending based on race, color, national origin, sex, marital status or income source.

6. Check applicant's assets (independent appraisal)
Form to applicant's savings institution, Physical security, Location, Zoning/taxes.

7. Gather necessary documentation
Can include gift letter, VA certification, Self-employment certification.

8. Underwriting

• If not qualified: Notify applicant with reasons for rejection
• If approved: Notify Realtor of approval, Realtor will notify the buyer.