Borrowerâ€™s Guide To Understanding The Mortgage Application
By: Nicole Gates
When applying for a new mortgage, the application can seem a bit complicated, but it doesn’t have to be. We break down each section of the application, explaining what each one entails and what you’ll need to provide.
Section One: Type of Mortgage and Terms of Loan
Section Two: Property Information and Loan Purpose
Here is where you’ll put information about the property you’re taking the loan out on. Most homebuyers haven’t selected a property yet at this point, so it can be marked “to be determined”. Also at this section, you will need to disclose the source of your down payment and who will own the property.
Section Three: Borrower Information
Basic personal information about you and any co-borrowers.
Section Four: Employment Information
Filling in this information allows your loan office to contact your employers in order to verify the information you provided was correct, as well as the amount of time you’ve been employed there.
Section Five: Monthly Income and Housing-Expense Information
This section has two sides. The left side is used to determine if you can repay the mortgage. The right side determines the amount of “payment shock” you may experience once you receive the mortgage. At this section, you may have to authorize your lender to request transcripts of your tax returns.
Section Six: Assets and Liability
Here you will have to make note of all your assets and liabilities. Assets include savings, checking, retirement funds and any other investments. Liabilities can be listed out from your credit report, but you should also mention any child-support or alimony you have.
Section Seven: Details of Transaction
This part is entirely up to your loan officer to fill out, but you should still read it carefully.
Section Eight: Declarations
This is your last chance to “own up” to any financial hiccups you’ve had. This can include bankruptcy, foreclosure, lawsuits or more. Make sure to be completely honest with you home loan officer for a smooth and quick mortgage process.
To see an example of a mortgage application, or for more information about educating yourself about the mortgage process, click here.