Mortgage Loan Applications 101
To get a loan to buy a home, you’ll need to fill out a mortgage application. This application — typically called the Uniform Residential Loan Application, or Fannie Mae Form No. 1003 — will help the lender determine whether you’re a good candidate for a loan and how much they’ll let you borrow. You can fill this form out to get pre-approved for a loan even before you find the property you want, and/or you can use it once you find the property you want and are applying to get a loan.
If you’ve never filled out a form like this before, you might feel a little intimidated. But don’t worry: You will work with your lender to complete the form. And this simple guide will walk you through all the types of information that you or your lender will need to provide for a mortgage application, so you know what to expect going in.
Type of Mortgage and Terms of Loan
You, with the help of the lender, must list which type of loan you want — FHA, VA, conventional or USDA/Rural Housing Service — the amount and length of the loan, the interest rate and some other details about the type of mortgage and its terms.
Property Information and Purpose of Loan
You will need to write in the details of the property you want to buy — its address, the year built, the legal description of the property and the number of units in the building. Then you will need to write in why you want the loan: Is it to purchase the property, a refinance, a construction loan or some other reason? (If the property is a refinance or construction loan, you will need to provide additional details on the improvements you plan to make, existing liens and a few other details.) You will also need to list whose names the title will be in and the source of the down payment.
You and your co-borrower (if applicable) must fill in your personal information, including your name, current address (and whether you rent or own), previous address – if less than two years — (and whether you rented or owned), Social Security number, phone number, marital status, date of birth, number of years of school and number of dependents. The lender will use this information to run your credit report.
You and your co-borrower (if applicable) will need to list out details of your employment. This includes the name, address and phone number of your employer; your position and job title; the type of business; the number of years you’ve held that position; and how long you’ve been in that field. If you’ve been in that position for less than two years, you’ll need to fill out previous employment details as well. Your lender will call your employer to verify employment. If you are self-employed, you will likely need to provide a minimum of two years’ personal and business tax returns and current financial statements.
Monthly Income and Combined Housing Expenses
You and your co-borrower (if applicable) will need to include details about your gross income — this includes your base employment income, overtime, bonuses, commissions, income from dividends, interest, rental income — and combined monthly housing expenses. These expenses include current rent or mortgage payment, insurance, taxes and homeowners association fees — basically any expense related to housing.
Assets and Liabilities
You and your co-borrower (if applicable) will need to list out what you own (your assets) and what you owe (your liabilities). Assets include bank accounts, investments, real estate, cars and businesses owned; you will need to list out the details (name of bank, account number) and market value for each of these. Liabilities include credit card balances, installment loans (i.e., car loans, student loans, boat loans), alimony and child support; for each, you will need to include account number, monthly payment amount, months left to pay and total unpaid balance. This allows the lender to analyze your current debt structure so that they can determine the amount of mortgage loan that you qualify for. The lender will also analyze your cash accounts to determine whether you have the necessary down payment amount and cash reserves required for the loan transaction.
Details of Transaction
The lender will write out the details of the loan — the purchase price, estimated closing costs, estimated prepaid items, loan amount and other details about the loan — on this application.
You will need to answer yes or no to questions about whether you have declared bankruptcy within the past seven years, whether there are any outstanding judgments against you and whether you have had a property or loan foreclosed upon or have been a party to a lawsuit. If you answer yes to any of these questions, you will need to provide further explanation.
Signatures and Final Information
You will need to sign this application in two places. At the top of the application, you and the co-borrower (if applicable) need to sign the form to acknowledge that you understand the terms listed at the top of this application. You also need to check a box to show whether or not the income or assets of the co-borrower (if applicable) should be used by the lender when determining the loan details. At the bottom of the loan application, you and your co-borrower will need to sign once again, acknowledging that all of the information provided on the loan application is true.
On the last section of the mortgage application, you will be asked about your race, ethnicity and gender but are not required to provide such information. The government uses this for its own internal monitoring process.