How to Obtain a Regular Mortgage Loan Secured by the Property Being Purchased

Properties secure the mortgage loans used to buy them.

Properties secure the mortgage loans used to buy them.

When a mortgage loan is used to finance the purchase of a home, the property itself acts as collateral. The lender will hold a lien against the property or hold it in a trust, depending on the state you live in, until the loan is paid in full. If you default on payments, the lender will use the foreclosure process to seize the property. A multitude of mortgage lenders are available to consumers in the U.S. There are requirements that must be met to obtain a mortgage loan, including a good credit score, stable income and down-payment funds.

Shop around for the best interest rate on a mortgage loan. Research rates using a website such as Bankrate.com. Select a few offers to consider.

Apply for pre-approval with the lender of your choice. Often the application will be available on the lender's website or by contacting a loan officer. You will need to provide basic information about yourself and your finances, including your Social Security number, address, profession, total debts and assets. This process looks at your credit report and stated income to estimate the amount of a mortgage loan the lender will approve you for. It's often a wise choice to be pre-approved for a set amount before you begin looking at homes.

Complete the official loan application. You will probably need to provide some type of income verification such as a pay stub or tax return at this stage. Wait for the lender to complete the underwriting process and make the final approval decision.

Attend the closing scheduled by the lender. Bring the cash required in the form of a check or money order. Review the documents as you sign them.


  • With a better credit score, you are more likely to get approved for a lower interest rate than someone with a lower credit score. Generally, a score of 680 or above is considered good. Without excellent credit, a larger down payment amount can sometimes help you avoid higher interest rates.


  • The underwriter might give a decision known as "approved with conditions." The conditions can range from providing additional forms of income verification to completing the sale of your existing property.

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