Initial Mortgage Loan Application: How to Get Approved Faster

Applying for a mortgage can feel like an overwhelming process if you don’t know where to start. Your initial mortgage loan application marks the moment your home loan officially begins. You give the lender enough information to evaluate your loan request and issue a Loan Estimate. Many buyers confuse this step with preapproval, but they’re not the same.

Understanding what you need to complete your initial mortgage loan application can help you avoid delays and move through the homebuying process with confidence.

What lenders need in your initial mortgage loan application

Before a lender issues a loan estimate, they must collect your information. This is the foundation of what is essential for completing an initial mortgage loan application.

According to the CFPB, lenders are required to give you a Loan Estimate once you provide:[1]

• Personal information: This includes your full legal name, date of birth, Social Security number (SSN), and current address. 
• Employment and income: You’ll provide your employer’s name, job title, how long you’ve been employed, and how much you earn. If you’re self-employed, lenders will also want your business information.
• Assets and debt: This includes your bank accounts, retirement accounts, and investments, along with your outstanding debts like credit cards, car loans, student loans, and personal loans.
• Credit authorization: You must give written permission for the lender to pull your credit report.
• Property details (for purchase): If you already have a home under contract, you’ll need to provide the property address, estimated value, and purchase price. 
• Required disclosures: Declarations about bankruptcies, lawsuits, foreclosures, and other financial events.

Step-by-step: How the initial mortgage loan application works

Completing an initial mortgage loan application follows these steps.

Provide your personal information 

You’ll provide your government-issued ID, current address, and SSN for identity verification and credit pull.

Authorize a credit check 

Most initial mortgage applications involve a hard credit pull, which may temporarily lower your credit score by a few points. Some lenders offer soft pulls that don’t affect your credit score, but a hard pull is required for official approval.

Submit income documentation

Your lender needs proof you can afford the mortgage by reviewing your pay stubs, W-2s, or tax returns. Lenders use this to verify stable income and calculate your debt-to-income ratio (DTI).

Submit assets and banking documentation

Bank statements, retirement accounts, investments, and other liquid assets show that you have enough money for your down payment and closing costs.

Identify property information (if applicable)

For purchase loans, you'll provide the property address, purchase price, property type, and estimated value.

Answer declarations 

You’ll answer questions about bankruptcies, foreclosures, lawsuits, and whether the property will be your primary residence, second home, or an investment property.

Receive your loan estimate

Within three business days of submitting your application, the lender must provide a Loan Estimate, which shows your estimated interest rate, monthly payment, and closing costs.

Decide whether to proceed 

Your Loan Estimate is typically valid for 10 business days, during which you can compare multiple lenders and choose whether to move forward.

Move to processing and underwriting

Once you accept the Loan Estimate, your file moves to processing for document verification, then to underwriting for final review and decision.

Required documents for an initial mortgage loan application

What are essential for completing an initial mortgage loan application? The documentation needed varies by borrower type, but here’s what most applicants need:

Documents for most buyers

• Government-issued ID (driver's license or passport)
• Social Security number
• Last 30 days’ pay stubs
• W-2s for the past two years
• Tax returns if self-employed
• Employer contact information for employment verification

Self-employed, freelancers, and commission workers

If you’re not a W-2 employee, expect extra documentation:

• Two years of business and personal tax returns
• K-1s (if you own an LLC or S-corp)
• Year-to-date profit and loss statement and balance sheet
• 1099 forms from clients
• Business license documentation (if applicable)

Asset and banking documentation

• Last 2–3 months of bank statements for all checking and savings accounts
• Retirement and investment account statements
• Documentation for gift funds (if applicable), including a gift letter stating the funds are a gift and proof of transfer

Additional documents (if applicable)

• Bankruptcy discharge
• Divorce decree or separation agreement
• Child support documentation (received or paid)

Refinance-specific documents

If you're refinancing your mortgage, here’s what you need to provide:

• Most recent mortgage statement
• Copy of note and deed of trust
• Homeowners insurance declarations page

What to expect on the Uniform Residential Loan Application (URLA / 1003)

Most lenders use the same government-standardized form for your application, called the Uniform Residential Loan Application (URLA) or the 1003 form.

This is a document you fill out online or in person and will typically include the following sections: 

• Borrower information: Your legal name, SSN, contact information, marital status, and other personal information
• Financial information: Your income sources, employment details, bank accounts, assets, and monthly debts
• Real estate and property: The properties you own and any outstanding balances on those loans
• Loan and property terms: Describe the property for which you’re seeking a mortgage 
• Declarations: Questions about the property, how you’ll finance it, and whether you’ve had any lawsuits, foreclosures, or bankruptcies
• Acknowledgements and agreements: Your signature confirming the accuracy of the information you just provided
• Continuation/additional information: Your demographic and loan originator information, and if you’ve ever served (or your spouse has served) in the U.S. armed forces.

How long the initial mortgage loan application takes

A mortgage application usually takes 30 minutes to an hour, provided that you’ve gathered all your documents. You’ll get a preapproval decision within the same day to three days. Final approval takes 20 to 45 days, depending on complexity.

How long your initial mortgage application takes depends on various factors. Your timeline may be longer if you:

• Work multiple jobs
• Are self-employed
• Receive commission or bonus income
• Use gift funds
• Have missing W-2s or tax returns
• Are a union worker or contractor

The more organized your documents are from the start, the faster your application will move through underwriting.

What happens after you submit the application

Once you submit your initial mortgage loan application, here’s what happens.

The lender issues your Loan Estimate within 3 business days 

The federal law requires that your lender provide your Loan Estimate within three business days of receiving your application.

Choose a lender within 10 business days

You have 10 business days to review and accept the Loan Estimate. You can also use this period to shop around and compare multiple lenders.

File moves to processing

If you accept the Loan Estimate, your file moves to processing, where a loan processor verifies your documents.

Then to underwriting 

An underwriter evaluates your entire file against lending guidelines and issues conditions. There might be additional documents needed before approval.

You satisfy conditions

Provide all the required documents as soon as you can.

Receive Closing Disclosure

You receive the Closing Disclosure at least three business days before closing. Then sign the final paperwork and receive the keys.

Common issues that slow down your initial mortgage loan application

These problems delay thousands of applications every year. Knowing and addressing them will speed up your application.

• Large unexplained deposits: Any deposit over 25% or 50% of your monthly income requires documentation.
• Changing jobs before or during application: Switching jobs before or during application requires a letter of explanation.
• Incomplete documentation: If you submit your application when other documents are missing, the loan processor will send your file back to the end of the processing queue.
• Credit disputes or freezes: Active disputes on your credit report require resolution before approval. On the other hand, credit freezes prevent lenders from pulling your report at all.
• Undisclosed debts: Debt obligations discovered during underwriting raise questions about application accuracy.
• Missing gift-funds documentation: Applying with gift funds but failing to provide the gift letter and proof of transfer immediately flags your file.
• Self-employed income inconsistencies: Significant income swings between years or between tax returns require detailed explanations.
• Divorce proceedings or unsettled decrees: Ongoing divorce or unsettled decree may also delay your application.

FHA, VA, and USDA documentation differences

Unlike conventional mortgages, government-backed loans require additional documents.

FHA

These loans include an amendatory clause that protects the buyer if the appraisal comes in below the agreed price. The clause allows you to back out of the sale without any penalty and receive a full refund of your earnest money. Otherwise, FHA documentation is similar to that of conventional loans.

VA

Active-duty military, veterans, and eligible spouses need a Certificate of Eligibility (COE), DD-214 discharge papers, and a residual income check. You'll also provide information about your nearest living relative.

USDA

You must provide income certification documents to prove you fall within USDA income limits for your area. The property must be located in a USDA-eligible rural area.

How to strengthen your mortgage application (for faster approval)

Before you start your initial mortgage application, here are tips to improve your approval odds:

• Clean up credit reports before applying: Dispute errors, pay down debt, and resolve any outstanding issues at least 90 days before applying.
• Reduce credit utilization: Pay down your credit card balances to lower your utilization ratio.
• Avoid new credit inquiries: Don’t open new credit lines or finance large purchases right before or during your application.
• Document gift funds early: If you’re using gift funds, make sure you get a gift letter from the donor and proof of transfer.
• Keep your job and income consistent: Avoid switching jobs, going self-employed, or making major career changes during the application process.
• Organize all statements before starting: Having three months of bank statements, two years of W-2s, and recent pay stubs ready can speed up the process.
• Work with a top local agent: A skilled agent can help you compare lenders, understand what documentation strengthens your file, and present you as a serious buyer to sellers.

Final takeaway

Completing an initial mortgage loan application successfully requires preparation. Gather all the documentation before you start.

A top buyer's agent can guide you through lender selection and help ensure your application package is as strong as possible. Clever Real Estate connects you with experienced local agents who can help you navigate the mortgage application process. Take a short quiz to get started.

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