Applying for an FHA Mortgage

June 16, 2022

There are multiple phases to the homeownership journey. In the planning and saving stages, you’ll decide what kind of home to buy and what kind of down payment to make. Once you have reached the stage where you are actually ready to apply for the loan, do you know how that process works?

When you shop around for a lender one thing to pay attention to is how much personal help you might need to apply--can you get personal assistance if you want it and submit completely online if you do not?

You have some basic options for this part of the process but those options depend greatly on the lender’s standards. Some take a hands-off approach, and with these financial institutions, you can apply online without help from a representative.

If you have experience with mortgages this is probably the solution for you but that might not be true if you are a borrower who doesn’t work much online or if you are not comfortable submitting documents electronically.

Some lenders featuring a fully online application may be able to provide assistance if needed but you may need to wait for a callback or return email to move forward.

And then there are the lenders that require a mix of online application features and some personal assistance from a representative. In these cases, you can expect to fill out a form with some basic information and wait to be contacted.

Some lenders may allow you to actually start the application but require some personal contact to complete the process. This may be more applicable for larger loans or for construction loans in some cases, depending on the lender.

And then there are the lenders who require you to be fully walked through the application. The lender may require an in-person visit at a branch, or a phone call to start the process. In some cases you might be allowed to send forms electronically but not without the lender’s help. 

This may be useful for the first-time home buyer who feels intimidated by the application paperwork or who has reservations about transmitting their personal data electronically.

Why discuss these approaches to home loan applications and take an entire article to do so? If you aren’t familiar with how a home loan application works, it’s easier to be taken advantage of by a scammer. Would you trust a lender who told you your down payment had to be delivered in the form of actual paper money instead of a check or a transfer?

If you didn’t know anything about how a mortgage loan works you might be fooled by that. But knowing that down payment funds are accepted by check or other means that are not paper money means it’s much harder to trick you into thinking otherwise.

A lender who does not accept a loan application without an in-person visit might seem a bit unusual if you aren’t familiar with that approach. It isn’t as common, but it is a practice that’s known in the industry.

But if you don’t know that, it’s good to be wary. Ask plenty of questions of your proposed lender and be sure to do some online reputation research before you decide. If you aren’t sure about one lender’s requirements (in-person, 100% online, or a combination of personal help and online application), ask for more information and compare that with other lenders offering similar options.

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