Filling out a mortgage application may not be at the top of your list of relaxing leisure activities. But it doesn’t have to be as dreaded as a root canal, either! With a little education and preparedness, you can nip those fears in the bud and conquer your application with confidence.
Better yet, when applying via Simplist, we take care to ask the right questions in plain English – so you don’t have to navigate the technical jargon associated with the five-page standardized application form, aka the Uniform Residential Loan Application (URLA). Also known by its form number, 1003 (“ten oh three”), it’s included in the disclosure package you receive when you initially apply.
The 1003 collects all the basic information needed to approve your loan across 10 sections. Here, we’ll explain each one. Find a blank application here to follow along as we go.
Section I: Type of Mortgage and Terms of Loan – This section, which is typically completed by the loan originator, describes your loan program & amount you want to borrow. If you are at the preapproval stage, the loan amount should be your maximum. This section includes all the terms of your loan including the interest rate, the type of interest rate, and the number of payments you’ll make to pay off the loan.
Section II: Property Information and Purpose of Loan – If you are applying for a preapproval, the subject property address will be blank along with the legal description and year built. The rest of any applicable data will be completed – it’s worth noting that a lot of the information in this section is quite technical, and more pertinent for the lender rather than the consumer. Got questions? Don’t hesitate to schedule a call with one of Simplist’s expert loan officers; they’ll be happy to break down the lingo for you. At this stage, you’ll decide who will be on the property’s title (ownership) and the manner in which the title is held (sole ownership, joint tenants, tenants by entirety, living trust, etc.) at this stage. Further specifics about the details of the loan are required here for construction loans or refinances.
Section III: Borrower Information – This section is where you’ll fill in your identifying information such as name, date of birth, social security number, and number of dependents. Have a co-borrower? You’ll need the same information for them as well. It’s very important this section be completed fully and accurately.
Section IV: Employment Information – This section will list your current employer and any past employers within the last two years. Please be sure to double-check any dates, addresses and phone numbers. You’ll have enough fields to input three previous employers in case you’ve changed jobs or worked multiple jobs concurrently. You’ll need this information from your co-borrower as well, if applicable.
Section V: Monthly Income and Combined Housing Expense Information – This section details your (and your co-borrower’s) monthly income and current housing expenses. Income fields encompass base pay, overtime, commissions, dividends/interest, and rental income. Other sources of income may be added and described separately in the “other income” field. Proposed housing expenses may be estimated if you are applying for preapproval.
Section VI: Assets and Liabilities – This section details your asset accounts – checking & savings account balances, retirement accounts, investment accounts will appear here. Focus on liquid accounts or those that can be liquidated. Next, you will see the liabilities that imported from your credit report, the current balances and payments. Generally, there is no need to update or change this information. Finally, there is a section for retirement accounts, life insurance, and properties, automobiles, and businesses you own. Don’t forget to include any additional names in which you’ve taken out a line of credit, and indicate those as well.
Section VII: Details of the Transaction – This section is a snapshot of the costs of the transaction – though it’s worth noting that these may change throughout the process as your financials are evaluated! These fields will mostly show estimates, so be prepared to examine each field to ensure it reflects what you had in mind. This includes closing costs, purchase price, costs agreed to be paid by the seller, and more.
Section VIII: Declarations – These are federally required questions, so be sure to carefully answer each one. These questions pertain to any history of bankruptcy, foreclosure, judgments, alimony and child support obligations, citizenship status and more. Co-borrowers will be required to answer these questions as well.
Section IX: Acknowledgement and Agreement – By now, the application is mostly completed and it’s time to sign off on it. Your signature acknowledges that the information provided is accurate to the best of your knowledge.
Section X: Information for Government Monitoring Purposes – In this section, you will be asked to provide demographic information for government statistics. Completion of this section is completely optional, though the Government retains this information to verify that lenders are compliant with equal opportunity housing guidelines and mortgage disclosures. Underneath, you will find one final section to be completed by the loan originator that you won’t need to worry about.
Keep in mind the mortgage application is a living document that will be amended, changed and corrected throughout the process. When reviewing it for accuracy, focus on the information that you do know, like your name, social security number, salary amount, and account balances. As noted above, some of the information will change along the way, like the amount of your homeowner’s insurance premium, real estate taxes, and more. So don’t stress too much over the numbers – and remember, Simplist is here to guide you through the process, offering as much or as little assistance as you require!