When you were searching for a home, you saved time by becoming pre-approved. By now, you may have chosen a home and written a contract. What comes next? The loan application process. Now you can save even more time and money by applying for your loan on-line.

On-line loans can save you time and money, as much as 3/4 of a point (one percent of the loan amount) and a couple of weeks in loan origination. With secured sites, customer service support centers, and lower loan costs, the ever-improving mortgage brokerage and lender sites are offering borrowers plenty of reasons to apply for a loan on-line.

On the Internet, loan application is one of the quickest events of the home buying process. Each company will take you through a standard loan application, a Fannie Mae designated form known as a "1003."

This is the form that the lender will use to investigate and verify information about the property and the borrower. You may be asked to produce any or all of the items from the Loan application checklist (see table) such as bank statements and employment records.

To apply for a loan, you will be taken step-by-step through the loan application process. Fill in the information fields, and then hit the apply button.

When the lender receives your application, a legal description of the property will be ordered. This will include a survey which will become part of the title report, the document that insures that you will have clear title to the property. The lender will also order an appraisal to determine if the selling price can be re-met should the home loan default.

The lender may insist that you have an inspection done on the property. This is done prior to writing the purchase contract in some parts of the country and after loan application in other areas. Most real estate professionals will advise you to get an inspection for your own protection. Any undisclosed flaws in the home, which may include items unknown (or known) to the seller such as termite damage or foundation problems should be revealed in the inspection, giving you an opportunity to re-negotiate the contract at a lower price or to have the problems fixed by the seller before the contract is finalized.

Be prepared in case further documentation is required before the lender finalizes your loan and funds the loan. Funding the loan means giving the money to the closing agent to disburse to the principals in the contract.

When you have finished your application, the lender will require you to send the items on the loan application checklist via mail, if the lender does not have a retail establishment in your city or town. The loan documents will be sent usually overnight or second day air to you to sign as well. You will be required to have your signature notarized.

An important point to keep in mind is that some on line mortgage brokers have different business models and will vary in the steps of the on-line application. For example, compare the differences between LendingTree.com, QuickenMortgage.com, and E-loan.com, three of the largest mortgage brokers on the Internet.

The Application Process

Go to QuickenMortgage at www.QuickenMortgage.com and click "Get Started" or try Lending Tree at www.lendingtree.com and click Start Looking for a Loan. On E-loan, click "Apply." On all three of these sites you can choose the loan type you want and complete an on-line qualification form. It takes about 15 minutes to complete the form. If you need help, look for calculators and tips to help you along the way.

The Process

On QuickenMortgage and E-loan, after you complete the qualification interview, the websites search through thousands of loans from multiple lenders and instantly shows you the best loans that you are qualified for at the current interest rates. You can select one of the loans and get more details such as a breakout of closing costs or more information about a specific lender. If you like what you see, you can print out a pre-qualification letter on-line or submit your loan application electronically to your chosen lender.

On the LendingTree site, your form is processed through LendingTree's proprietary filtering software that then matches borrowers and lenders in order to maximize approvals and minimize denials across all loan types. LendingTree's software also makes it possible for lenders to respond directly to you in a matter of minutes. To complete the loan process, you can then call lenders directly or specify a time the lender can contact you. E-loan will express mail your loan package, which you must complete before your loan can be approved. The credit report is ordered and your application is submitted to a lender.

Quick responses, multiple offers

On QuickenMortgage, you will hear back from your selected lender within 24 hours. Because you have already been pre-qualified on the website, the lender can immediately begin processing your application, saving you time and money. Within two business days, LendingTree will notify you by email about lender responses to your loan request. To view each lender's offer (up to four possible) you go back to the home page of www.lendingtree.com and click on Check Your Loan Status. E-loan will notify you by e-mail that it is time to lock in your rate, as well as informing you if a loan specialist or consultant will be handling your account for you. E-loan also suggests that you track the progress of your loan with its E-track feature and that you check your e-mail daily in case more information or documentation is needed.

Close the Loan

After you choose to go forward with your loan, you will need to communicate with the lender directly (via mail, e-mail or phone) to complete the loan process. You will need to verify the information you provided through the site through W-2 forms, pay stubs, house appraisals etc. You'll also need to sign the official application forms from the lender and schedule a closing. For either site, you won't be going through the loan process alone. You will be assigned a personal customer service advocate when you complete your qualification form. Feel free to call on them to help you through the process. It's important to evaluate all of the terms of each offer before you choose the one that's best for you. Compare the interest rate, APR, points, loan amount, loan term and other details of the loan offer, particularly closing costs. You may want to use QuickenMortgage's or LendingTree's on-line calculators to help you make your decision. With E-loan, your loan specialist or consultant will be in communication with you helping you to get an appraisal, set a closing date, set up a closing agent (title company) and other steps toward closing. The lender will wire the loan amount to the closing agent for closing.

Published: April 14, 1999

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Blanche is a renowned author of five real estate books. Her newest, Bubbles, Booms and Busts: Make Money In Any Real Estate Market, McGraw-Hill, was rave-reviewed by The New York Times. She was also selected from hundreds of real estate experts to contribute to Donald Trump's book, Trump: The Best Real Estate Advice I Ever Received: 100 Top Experts Share Their Strategies, Rutledge Hill Press, and is featured on page 68. Order Now Review - Honors In 2006, Blanche was selected among scores of candidates to author two consumer real estate guidebooks for the National Association of Realtors: The NAR Guide to Home Buying, and The NAR Guide to Home Selling, Wiley & Sons. She is currently planning two new books for the NAR and its members.       Known for her keen insight into real estate industry issues and for her ability to make complex subjects easy to understand, Blanche is a sought-after keynote and continuing education speaker. Real estate organizations from MLSs, to brokerages, to franchisors, to associations hire her to provide up-to-the-minute analysis of real estate industry news and advice on how to improve revenues. Her passionate delivery, peppered with stinging wit, is a huge hit with audiences and fans. Don Klein, CEO Greater Nashville Association of Realtors, Blanche Evans, Richard Courtney, president 2007, GRAR "The GNAR membership meeting last week featured Blanche Evans as the keynote speaker. Her comments and insights resonated extremely well with those in attendance and we have had many requests for copies of her PowerPoint Presentation. She was a terrific part of the membership meeting and convention program!" - Don Klein, CEO Greater Nashville Association of Realtors Coverage from WSMV, Nashville - 8-14-2007 That Interview Guy - Get Inside The Head Of Today's Generation 2007 AE Institute Session - To purchase 2006 AE Institute Session - Parts 1 2 3 4 5 6 7 8 9 HouseValues Mastermind call - Parts 1 2 Blanche's fireside chat with Jeremy Conaway, HAR - Click here. For more articles by Blanche, click here.