Pre-approval - Get pre-approved for a mortgage and know in advance exactly how much house you can afford. Completing this step will also increase your negotiating power since you'll be viewed as a "cash buyer".

Loan Program Selection - Put yourself in the hands of an experienced mortgage professional, someone who will help you to determine which financing options best suit your needs today and in the future.

Loan Application - It's crucial to supply the lender with as much information as possible, as accurately as possible. All outstanding debts as well as assets and income should be included.

Documentation - Paperwork supporting the application must also be submitted. Information commonly sought includes pay stubs, two years' tax returns, and account statements verifying the source of the down payment, funds to close and reserves.

House Hunting - Begin shopping for a house. Once you find the right one, the terms of the sale will be negotiated, including the price and potentially the terms of the loan being sought.

Appraisal - Lenders require an appraisal on all home sales. By knowing the true value of the home, the borrower is protected from overpaying.

Title Search - This is the time when any liens against the property are discovered. A lien may have been placed on a property to ensure payment of outstanding debts by the owner. All liens must be cleared before a transaction can be completed.

Processor's Review - All pertinent information will be packaged by your mortgage professional and sent to the lending underwriter, including any explanations that may be needed, such as reasons for derogatory credit.

Underwriter's Review - Based on the information put together by the loan professional, the underwriter makes the final decision regarding whether a loan is approved.

Mortgage Insurance - If your down payment is less then 20 percent you will need mortgage insurance. After your file is complete and underwriting to the investor criteria it will then be submitted to the mortgage insurance company for their approval as well.

Approval, Denial or Counter Offer - In order to approve a loan, the lender may ask the borrowers to put more money down to improve the debt-to-income ratio. The borrower may also need a bigger down payment if the property appraises for less than the purchase price.

Insurance - Lenders require hazard insurance on the replacement value of the structure. Flood insurance will also be required if the property is located in a flood zone. In California, some lenders require earthquake insurance on condominiums. To allow for ample time in finding the best hazard insurance premium start shopping for your insurance company as soon you have signed the purchase agreement.

Signing - During this step, final loan and escrow documents are signed.

Funding - At this point, the lender will send a wire or check for the amount of the loan to the title company. This has to occur prior to recording of the closing documents.

Confirmation of Funding - The lender authorizes the disbursement of loan proceeds.

Closing - Documents transferring title will now be officially recorded by the County Recorder. This happens usually on the day after signing the closing documents.

Congratulations, you are now a homeowner!