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Step 6: Applying for a Mortgage

Good news: your offer has been accepted! It's time to address financing.

You may have gone through the pre-qualification or pre-approval process (see below for more information) prior to starting your house hunt. But applying for a mortgage is a much more thorough undertaking.

There are numerous options for financing the purchase of your new home, and gathering the right information is key to making a good decision. These tools will help you get organized to apply for a mortgage:

The Loan Terms

The loan's terms—the costs associated with borrowing money—may vary from lender to lender. Be sure to compare

  • Interest rate
  • Whether the interest rate is fixed (the same for the life of the loan) or adjustable (changes regularly after an initial period)
  • Whether the interest rate can be locked in when you apply for the mortgage. For how long? At what cost?
  • Closing costs: fees charged to process the mortgage
  • Other fees charged by the lender. Do all lenders charge these fees?
  • Does the lender offer MassHousing loans?

To obtain a MassHousing loan, you must apply with a participating lender.

Obtaining a Mortgage

Applying for a mortgage can be one of the more challenging parts of buying a home; the process is filled with uncertainty. But don’t be discouraged if you have questions and concerns. In fact, many of the questions you're asking may have already been answered. Read our mortgage application Q&A.

Pre-Qualification vs. Pre-Approval

During your search for a home, you will undoubtedly hear the terms pre-qualified and pre-approved. Pre-qualified means that based on the information you have provided, you would be eligible for a mortgage loan.

Pre-qualified does not guarantee you a mortgage, nor does it guarantee the rate at which the lender will loan you the money. Pre-approved, on the other hand, guarantees (typically for a period of 30 to 60 days) a mortgage loan at a specified rate. Pre-approval gives the seller confidence that the buyer will be able to obtain a mortgage, which can greatly affect the seller's accepting an offer.

It's important to note that obtaining a pre-qualification or pre-approval from a lender does not obligate you to get a loan from that lender.

Where to apply

While you may have a lender in mind, and may even be pre-qualified (remember, you are not obligated to borrow from a lender who has pre-qualified you), shopping for the best rates and terms can save you a lot of money over the life of the mortgage. Explore the rates and terms of

  • Mortgage companies
  • Savings and loan institutions
  • Federal credit unions
  • Other financial institutions

The most important thing is to find a lender you can trust and a loan that will remain within your budget over the long term. Finding the best rate and terms may require numerous phone calls and a significant amount of time, but the effort will be well worth it in the end.