The basic purpose for a mortgage application form is in fact to aid the lender in deciding if a loan application is to be approved or not. This form also known as Fannie Mae form N0 1003 is the industry standard, uniform loan application form. In this article we will go over the process of filling this form and what type of information is required in the mortgage application process.
Type of Mortgage & Terms of Loan
This section of the form will describe in detail, the type or kind of loan program that a borrower is applying to. This section of the form cannot be completed by the borrower instead the loan officer completes this section and fills in the details.
Property Information & Loan Purpose
Usually at the application stage the borrower may not have identified the property for which they are applying to purchase, So parts of this section of the mortgage application form will be marked as “to be determined”. Also in this section the borrower will have to state who will own the property and they will have to disclose where their down payment for the intended property will come from, this can be a gift, first time home buyer program or cash.
In this section you will have to fill out the borrower and if they are, the co-borrower information, this information should include their full names, telephone numbers, social security numbers, birth certificates, marital status and any other related information that would be needed for the processing of the form.
The information provided in this section will allow the lender to make contact with the borrowers employers or employees to ascertain the veracity of the length and terms of the borrowers employment. The minimum requirement is generally pegged at two years of work history. It is important that borrowers are truthful in this section since any misinformation can scuttle the whole process.
Monthly Income & Combined Housing Expense Information
From this section the lender can calculate the borrowers ability to repay the loan, one thing you have to note is that lenders calculate income a lot differently from how borrowers think. You may be required to fill out form 4506-T, from the internal revenue service. This form will empower the lender to request for a transcript of the borrowers tax returns. The process of verification for this form from the IRS might take up to five or six weeks. Lenders give more credence to borrowers who have shown they can save money and are also putting their own money in the deal.