Real Estate Mortgage Loans

 Real Estate Mortgage Application Process

 Buying a home is probably the most important purchase you will ever make. Typically, you will need financing to make purchasing a home a reality. This financing need begins the mortgage process.

When you stop in to see us, we will assign you a loan officer to guide you through the mortgage application process. Our officer will answer all of your questions, keep you up to date on your loan's status, and help you organize all the financial information we require. The mortgage application process generally takes about two to four weeks, however approval of your mortgage is usually communicated to you within two weeks.

To assist you in understanding the application process, please review the following information which explains the mortgage application process from start to finish.


Our loan officer will lead you through the preliminary questions. Your answers will determine your loan needs and the mortgage product which is right for you. We utilize two ratios in this analysis.
Debt ratio compares all of your monthly debt payments to your monthly gross (pre-tax) income.
Housing ratio compares all your monthly housing expenses to your monthly gross (pre-tax) income.

Once this analysis is complete, we start the actual application. Detailed information is required about yourself and the property you wish to mortgage. Although this personal information is highly confidential, it is imperative that the information given be truthful and complete. This will ensure that your loan application and processing will progress smoothly.
We will ask you to provide supporting documentation such as bank statements, paystubs, and tax returns. We will also need you to sign documents for verification of employment and bank accounts that will be needed during processing.

Our loan officer will provide you a Good Faith Estimate of the settlement charges for closing your loan. You will also be provided a Truth-in-Lending disclosure that states the APR (annual percentage rate) and estimated payments, and a settlement booklet. The settlement booklet explains the fees involved with a mortgage loan.

The mortgage staff at the bank will then make sure all of the information is accurate, complete and meets certain marketing. At this time, we will order credit reports, appraisals, and verifications. When the file is complete, it will be returned to the loan officer for approval.


This process determines whether or not your mortgage loan will be approved. The loan officer will review all of the documents for completeness, accuracy, and legibility. The file is then analyzed for four factors: collateral, capacity, character, and capital.

Collateral is the estimate of the property's value and physical condition. This value determines the maximum mortgage possible for this property.

Capacity are the financial resources available to you and your ability to make monthly house payments.

Character is determined by your credit history. This history serves as a barometer of your desire to make your house payments. A history of bad credit does not mean automatic denial but you must be prepared to explain this history to your loan officer.

Capital is the amount of liquid assets available to make the necessary down payment and pay the closing costs that are associated with your loan.

After this review is complete, the loan officer will make a recommendation to the Loan Committee of the Board of Directors. The recommendation will be either to approve, approve with certain conditions, or deny your request.

The Loan Committee will review the mortgage package and either support the loan officer's recommendation, request more information, or reverse the loan officer's recommendation.
If the loan is approved, the mortgage package is signed, dated, and sent off for closing. You will receive a confirmation of the approval with a written mortgage commitment. If the loan is denied, you will receive a written notice of denial.


The final step in the mortgage process is the preparation of mortgage documents for final transaction, signatures and recording.
Your mortgage is now official and title to the property passes to the buyer. You now are the legal owner and have a legal obligation to repay the mortgage debt on the property.

  If you are interested in applying for a loan from the Farmers & Merchants Bank & Trust, please stop in, telephone, or e-mail us a request using our Contact Us page.