Mortgage Process

Now that you've learned some basics, let's go through the steps of getting a mortgage.

Step 1: Determine your budget

Don't look for homes until you know what you can reasonably afford. Remember to not only factor in your monthly mortgage payments, but also taxes, insurance, maintenance and any other monthly costs (car, student loan, credit cards). You can use our Mortgage Calculator to help estimate your monthly mortgage payment.

Step 2: Find a Lender

Now that you have an idea of what you can spend, it’s time to find a lender. Unless you are paying cash for the home, you’ll need to work with a lender to secure financing. And similar to the process of finding a real estate professional, you should talk with a few lenders to find the best fit for your situation. Remember, while the interest rate you’ll pay is a big factor, it shouldn’t be the only factor. Also consider—the different types of loan options available, their customer service, closing costs and other fees, etc. This is the largest financial investment you’ll make, so shop around.

Types of Lenders:

  • Online Mortgage Broker/Lead Service – There are multiple online services (i.e.,, that don't actually lend money, but will work with multiple financial institutions to help you find the best deal.
  • Mortgage Broker – Similar to above, a broker doesn't work for a particular financing institution. Instead, they work with multiple lenders to find you the best rate or loan product to meet your needs.
  • Financial Institution (Bank, Credit Union, etc.) – Most major and local banks offer mortgage products, and it's always a good idea to check with your current bank or credit union when looking for a lender. Many times they may offer their current customers preferred rates or discounts.
  • Non-bank mortgage lender – If your bank or credit union doesn’t offer you the mortgage product you’re looking for, be sure to search for a non-bank mortgage lender. There are many companies that specialize just in financing for homes.

Still need help finding a lender? Ask family and friends for referrals or talk to your real estate agent (many times agents will partner with a few different lenders). Also, search the Internet for a mortgage lender—and ask if they are an approved Fannie Mae lender.

Step 3: Get Pre-Approved

Once you find a lender, you’ll want to get pre-approved. Even if you have an idea of what you can spend, you’ll want to work with your lender to determine the exact amount of financing. Sometimes this is less than you anticipated, sometimes it's more. Keep in mind, you shouldn’t necessarily increase your buying power even if the lender approves you for a higher amount. If you know what your limit is, don’t increase that amount just because you can. Also, ask your lender about special financing and resources like the Down Payment Resource that can provide down payment assistance or reduce your upfront costs.

Step 4: Shop for a Home

After you're pre-approved, it's time to start house hunting!