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What is on a Mortgage Application?
Lenders require that borrowers submit a loan application when you apply for a mortgage. All lenders use the same standard mortgage application form – referred to in the lending industry as a Universal Residential Loan Application (URLA). The mortgage application contains a lot of questions about a borrower's income, assets, debt, residence history and employment history. Lenders use this information to determine your ability to qualify for the mortgage. They want to make sure that you can afford your monthly payment and pay back the mortgage over time.
The loan application is an relatively lengthy document with multiple pages and many questions and fields you are required to fill-out. The good news is that most lenders provide an online mortgage application which streamlines the process and allows you to submit the application from the comfort of your own home. Keep in mind that mortgage applications require a significant amount of sensitive personal information so be sure that you are working with a reputable lender before you submit an application.
A mortgage application requires you to submit the following information:
- Personal information for all borrowers including your date of birth, social security number, marital status, citizenship status and number of dependents
- Your current address and total monthly housing expense such as your mortgage payment plus property tax, homeowners insurance and property taxes if you own a home or your monthly rental payment if you are renting a home
- Your job history for the prior two years including employer and job title
- Your monthly income including base salary, overtime, bonuses, commissions, dividends and interest and any other sources of income. Self-employed applicants are require to provide additional documentation
- A summary of all of your assets including your checking, savings, brokerage and retirement accounts including the name of the financial institution, account number and current cash or market value
- A summary of all of your debts including monthly payments and current balances for credit cards, auto and student loans
- Any child support or alimony payment obligations
- A list of any real estate you currently own including the property value, current mortgage balance, monthly loan payment, property tax, insurance, homeowners association dues (if applicable) and any rental income associated with the property
- Summary loan terms including proposed mortgage amount and loan purpose (purchase or refinance)
- Address of the property being financed and if the property is your primary residence, secondary residence or an investment property
- Any other loans or debt secured by the property you financing
- Rental income from the property being financed, if applicable
- Any cash or equity gifts or grants you have received and the source
- Information on any other mortgages or loans you have not disclosed or that you intend to apply for before the mortgage closes
- Declarations regarding any current or prior credit or legal issues including bankruptcies, foreclosures, short sales, federal debt defaults, delinquencies, judgements or lawsuits
- Current or prior military service
- Demographic information including your ethnicity, race and gender, although you can elect to not provide that information
- How the application was submitted, either face-to-face or by phone, mail, fax, email or online
- Contact and license information for the lender (known as a loan originator)
In addition to the online or paper application that you fill-out, applicants are also required to provide personal and financial documents to confirm the information in you submitted. For example, lenders usually require that borrowers provide pay stubs (two months); bank, investment and retirement account statements (two months); tax returns (two years); W-2 forms (two years); and, current account statements for any loans you have such as credit car, auto and student loans. If you are self-employed or own an investment property you are required to provide additional documents including supplemental tax information as well as certain bank and financial statements, as applicable.
We provide a mortgage checklist that lists the personal and financial documents you will likely be required to provide to the lender when you apply for a mortgage. Information from these documents is also used to fill-out the loan application so we recommend that you gather, organize and review them at the beginning of the mortgage process.
The personal and financial documents that you provide are part of your application and used by the lender to make sure that the information you provided is accurate. After your offer to purchase is accepted, lenders add the property price, address and other information to your loan application. Lenders also attach your credit report and other documents to the application and the completed package, including the title report and property appraisal, is reviewed by the lender's underwriter who ultimately approves or rejects your loan. The underwriting process usually takes one-to-four weeks depending on the applicant, lender, escrow period and market conditions.
Underwriting usually approves your loan with conditions that you are required to satisfy before receiving final approval. For example, you may be required to provide additional personal or financial documents or resolve an issue identified on the title or appraisal reports. You may also be required to provide a letter of explanation to clarify an item on your credit report or loan application. When all of the conditions to closing have been satisfied, your mortgage application receives final approval and you are cleared to fund and close your loan.
It is important to emphasize that you should provide truthful and accurate information on your loan application. Lying or providing false information is mortgage fraud which is punishable by a fine or potentially jail time. Applicants should contact their lender to clarify any questions about the loan application and make sure they are providing correct responses.
Lenders cannot charge borrowers a fee for submitting a mortgage application or for providing a Loan Estimate. The lender must provide the borrower a Loan Estimate that outlines a good faith estimate of key mortgage terms and costs within three business days of the borrower submitting a loan application. The Loan Estimate basically shows you the mortgage the lender is offering you and enables you to compare loan terms for multiple lenders. The only fee a lender can charge the borrower when taking a mortgage application is a small credit report fee ($10 - $30).
Additionally, lenders are not permitted to require the borrower to provide documents that verify the information on the borrower’s mortgage application before proving the Loan Estimate. If a lender attempts to charge you to take a mortgage application or provide a Loan Estimate, immediately stop working with that lender and report the lender to the Consumer Finance Protection Bureau (CFPB).
We always recommend that you shop several lenders before submitting a loan application. Contact multiple lenders in the table below to request mortgage terms and requirements. Comparing proposals is the best way to find the lender and loan that are right for you.
Sources
"Uniform Residential Loan Application (URLA)." Originating & Underwriting. Fannie Mae, March 1 2021. Web.
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