When you're applying for a mortgage, you'll be asked to provide specific information to help the lender make a final decision. A mortgage application, known as a Form 1003, has 10 sections. The more information you can provide at the initial meeting with the lender or loan officer, the less you may have to dig up later.
Many borrowers are overwhelmed by the sight of a mortgage application, but it's not as bad as you might first think. The first part allows the lender to learn more about the home you plan to buy. You can find most of this information on your purchase and sale agreement, including the property's value, type and size. Property types include single family, multiple family and commercial properties.
One of the reasons accuracy is so important when filling out this section is the lender will need to determine whether the loan is a traditional or jumbo loan -- $417,000 or higher in most states. This section also requires you to decide how you want your name listed on the deed, which is registered with your state or county clerk's office.
The next two sections of Form 1003 involve personal information, and most lenders will ask the borrower for documents to validate these details. Your identification will typically be verified by a driver's license or passport. You'll be asked your marital status, how long you've been living at your current address and how long you've been at your job. This information will generally be validated later through employment- and rent-verification forms.
Income and Expenses
Before a lender can determine whether you are eligible for a loan, he must get an accurate view of your monthly income and expenses. This section of the mortgage application will be used to determine your ability to repay the loan you want. Income declarations include paychecks, payments from child support and any other income that may be used to consider loan eligibility.
Expenses should include current rent payments, monthly insurance payments and any homeowner's association dues. Expenses such as life insurance and health insurance shouldn't be included in this section, since the application has a separate area for this information.
Assets and Liabilities
The assets and liabilities section of the Form 1003 should include all of your assets, including life insurance, retirement funds, equity in a business or real estate, and the value of any cars. To avoid delays, you may bring bank statements, credit card statements and statements for your retirement accounts. The lender often will require you to provide documents that are less than 60 days old once your loan is approved.
The liabilities section should include credit card balances, car loans and all other loans. The lender will require you to disclose monthly payments and balances due on each type of loan. Child support, alimony payments and union dues or other typical work expenses must also be disclosed in this section. This information is typically verified through your credit report.
Details and Declarations
The lender will need to know the amount of the home purchase, how much your down payment is and if you plan to use other loans for financing. Typically, this section will be filled out with the help of the loan officer because some of the information isn't available to you as the borrower. The final section of the loan application asks for your legal status. It also confirms whether you've ever had a property foreclosed on and whether you have any pending lawsuits or judgments. The lender will also ask if you plan to occupy the property to be financed.
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