What Is The 1003 Mortgage Application
The 1003 mortgage application, also known as the Uniform Residential Loan Application, is the standard form used by nearly all mortgage lenders in the United States. This basic formor its equivalent, Form 65is completed by borrowers when they apply for a mortgage loan. While some lenders may use alternative forms or simply accept basic information from the borrower about their finances, the property type, and its value, the vast majority of lenders rely on the 1003 form.
Details About The Home:
- Property tax, condo fees and heating cost estimates
- A copy of the real estate listing
- A copy of the accepted Offer to Purchase agreement, including the exact purchase price
- A copy of the home appraisal, home inspection and/or land survey
- Your lawyers name, address and phone number
Once your broker or lender has all of these details, theyll send the application to an underwriter at the financial institution youre asking for a loan from. The lender will use debt service ratiosto determine if your application fits within their guidelines. If the lender is satisfied that both your finances and the property fit within their qualifying guidelines, theyll approve you for the mortgage. The typical turn-around for a mortgage approval is 4-8 hours.
Documents Youll Need For Nonconventional Loans
The documents listed above are typically required for both conventional and nonconventional loans, including FHA loans and USDA loans. However, some nonconventional loans may have other mortgage preapproval documents.
For example, since only certain people may qualify for the VA loan , youll need to provide further documentation to verify your eligibility. Depending on the borrower, such required forms may include:
DD Form 214: This verifies your military discharge, retirement or separation, and is required for veterans. Surviving spouses must provide their spouses DD Form 214, along with their marriage license and souses death certificate.
Retirement Points Statement : This form confirms the number of credible years of service in the military, including attending drills and going through training. This is needed for discharged members, who will also need to show proof of an honorable discharge.
Statement of Service: A statement of service proves active military status for active-duty service members, or current National Guard or Reserve members. It must be printed on official military letterhead and include the service members full name, date of birth, Social Security number, entry date of duty and time lost. It may also include credible years of service, date of activation, orders activated, training status and the name of the commander providing this information.
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Bringing It All To A Close
Youve made it to the final step in the home-buying process. All the planning, preparation and waiting are finally over. But before you get the keys to your new home, you have one more thing to do.
At your closing, you will meet with your closing agent to sign all your mortgage documents. Take your time, make sure you understand what youre signing and dont be afraid to ask questions. And voilà, once youve dotted all the Is and crossed all the Ts, youll officially be a homeowner!
The closing process doesnt have to be nerve-wracking if you know what to expect. We can help you prepare for this exciting step, so your big day is a success.
We understand how overwhelming the home-buying and mortgage process can be. You can count on us to help you through it. Buying a home can be one of the most exhilarating and stressful moments of your life. But finding a home you can call your own makes it all worthwhile.
What Information Is Needed For A Mortgage Application
There is no reason to be daunted by applying for a mortgage. Your principal job is to gather the information together that the mortgage company will need in order to process your loan application. The information is pretty straightforward, primarily involving your income, assets and liabilities.
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Get Your Approval Letter
Once you find the best mortgage solution for your needs, you can see if youre approved online. If you are, well send you a Prequalified Approval Letter that you can use to begin house hunting. If you want an even stronger approval, you may want to consider contacting a Home Loan Expert and applying for a Verified Approval.
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What To Do If A Lender Refuses Your Mortgage Application
A lender could refuse you for a mortgage even if youve been preapproved.
Before a lender approves your loan, theyll verify that the property you want meets certain standards. These standards will vary from lender to lender.
Each lender sets their own lending guidelines and policies. A lender may refuse to grant you a mortgage if you have a poor credit history. There may be other reasons. If you dont get a mortgage, ask your lender about other options available to you.
Other options may include:
- approving you for a lower mortgage amount
- charging you a higher interest rate on the mortgage
- requiring that you provide a larger down payment
- requiring that someone co-sign with you on the mortgage
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Documents Needed To Start Mortgage Process
Documents needed to process a mortgage application are the following.
Any delay with providing the documents needed to process a mortgage application will cause a delay in the home closing. Two months most recent checking accounts, savings accounts, and other bank statements such as certificate of deposits, IRA accounts We will need all pages of bank statements even if they are blank.
In the event you do not have the most recent bank statements handy, you can go to the bank and request a transaction history of bank statement printouts. Printouts need to be signed by the bank employee or bank teller. The bank statement needs to be dated and stamped by the bank employee. These bank statements are good for 60 days from the date it was signed and issued. Borrowers who are a member of a credit union they need to provide at least 2 most recent bank account statements. We need every single page of the statement from the credit union even if it is a blank page.
Borrowers who cannot find or locate credit union statement they need to go to the credit union and get the credit union employee to sign, date, and stamp your statement. Like a signed bank statement, these statements will be valid for 60 days from the issued date.
Current Minimum Mortgage Requirements For A Usda Loan
Down payment. Borrowers that meet the USDA income limits can purchase a home with no down payment. Money needed for closing costs can come from your own funds or from a gift.
USDA guarantee fees. The USDA requires two types of guarantee fees instead of mortgage insurance. The fees are charged to offset the costs of the rural loan program to taxpayers. The first is a guarantee fee of 1% of the loan amount and is typically financed. The second is an annual guarantee fee equal to 0.35% of the loan amount, which is divided by 12 and added to the monthly payment.
. Although the USDA doesnt set a minimum score, USDA-approved lenders typically require a minimum credit score of 640.
Employment. USDA borrowers must have 12 months of stable income. If youre self-employed, a two-year history is required.
Income limits. The USDA counts the income of all adult household members to ensure the household income doesnt exceed the program limits in your area. Total household income for a USDA loan must be at or below 115% of the median household in the area youre buying. Use the income eligibility search tool to check on the limits in your state.
DTI ratio. The front-end DTI ratio maximum is 29%, while the back-end DTI ratio maximum is 41%. USDA borrowers with a credit score of 680 or higher may qualify with higher front- and back-end DTI ratios of 32% and 44%, respectively, with proof of steady income and extra cash reserves.
Occupancy. USDA financing is for primary residences only.
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Applying For Home Loan
To apply for an official mortgage home loan, the mortgage loan borrower will need to provide us with you will detailed documentation of credit and financial history. Lenders need to pull credit report from a credit agency This will confirm and verify the information provided in the online mortgage home loan application
The following documents will be required for loan officers to process and underwrite borrowers mortgage applications.
Retirement Or Investment Account Statements
If you are retired, you need to show proof of any retirement income. According to Wise, the best way to do so is with an award letter. An award letter is one that either the Social Security Administration gives you or that can be provided by the retirement fund that youre using. The letter shows how much youre getting paid every month.
As far as personal retirement accounts, stocks, and other investments youve made that you want to have considered in your income you will have to show the lender your investment accounts. This may include showing copies of your stock certificates and records, investment or securities accounts for the last three years .
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Documents You Need To Get A Mortgage
It used to be possible to borrow vast amounts of money to buy a home with almost no documentation. But since borrowers who cant prove their income are more likely to default, the banking industry has become much more careful about who can borrow money which means even very strong buyers have to supply stacks and stacks of documents to prove theyre worthy.
If youre applying for a mortgage, you can expect your lender to ask you for most of the items on this listand perhaps even more if your situation is at all unusual.
1. Tax returns
The lender wants to be reasonably sure that your paycheck is high enough to allow you to meet the mortgage payments every month. They feel more confident if your salary has been relatively stable for the past few years. Thats why most lenders will ask to see tax returns going back at least two years. If your income has jumped recently, the lender may want additional documentation to assure them that it wasnt just a one-time windfall, like a bonus that is unlikely to be repeated.
2. Pay stubs
The tax returns prove what your income was last year and the year before, but your recent pay stubs tell the lender that youre still earning the same amount.
3. Other proof of income
4. Employment letters
5. Proof of funds
6. Photo ID
Thats right the lender wants to make sure you are who you say you are. A copy of your drivers license is usually sufficient.
The Bottom Line: Organizing Your Mortgage Documents Saves Time And Energy
Having all your documents in one place wont guarantee that your application will be approved, but staying organized can expedite the process and remove some of the stresses of buying a home.
Keep in mind that your final list of documents may look different, as required documentation varies from lender to lender. If you have specific requirements for a mortgage or a unique financial situation, consider asking your lender to provide their own list of necessary mortgage documents.
Ready to start the process, but intimidated by all the paperwork involved? Rocket Mortgage® makes your mortgage application process easy. Get started online or talk to one of our Home Loan Experts today at 785-4788.
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What Information Is Needed On The 1003 Form
The 1003 form is intended to collect all the information that a mortgage lender needs to determine whether a potential borrower is worth the risk. While some lenders do not require employment information to consider a new mortgage, the 1003 form calls for at least two years of employment history, including monthly income.
The 1003 form also requires the borrower to note any other household income, as well as provide an itemized list of their assets and liabilities.
A borrowers assets include anything that could be used or liquidated to cover loan payments:
- Stocks, bonds, mutual funds, or other investments
- IRA, 401, or similar retirement accounts
Lenders also need to be made aware of any other debts for which the borrower may be liable , such as car loans, credit card debt, student loans, or open collection accounts.
If the borrower owns any other property, as either an investment or a second home, the 1003 form requires the disclosure of these assets and any mortgages tied to them.
In addition, the 1003 form requests information about the property that the borrower wishes to buy with the new mortgage.
What To Provide To Your Lender Or Mortgage Broker
Before preapproving you, a lender or mortgage broker will look at:
- your assets
- your income
Youll need to provide the following:
- identification
- proof you can pay for the down payment and closing costs
- information about your other assets, such as a car, cottage or boat
- information about your debts or financial obligations
For proof of employment, you may have to provide:
- a proof of your current salary or hourly pay rate (for example, a recent pay stub
- your position and length of time with the employer
- notices of assessment from the Canada Revenue Agency for the past 2 years, if youre self-employed
Your lender or mortgage broker may ask you to provide recent financial statements from bank accounts or investments. This will help them determine if you have the down payment.
Your debts or financial obligations may include your monthly payments for:
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Documents Youll Need To Apply For A Mortgage
- Social Security numbers, or individual taxpayer identification numbers for all borrowers.
- Home addresses for at least the past two years.
- Your most recent paystubs covering at least 30 days of income
- Your most recent W-2s , or if self-employed, 1099s or K1s
- Your most recent Federal Tax Returns , including all pages and all schedules. Note: if you are self-employed, you may need to provide both your personal and business tax returns.
- Two to three-months of statements for each of your accounts: Checking, savings, IRA, 401K, credit cards, etc.
- Information on other consumer debt accounts such as car loans or leases and student loans
- Social Security award letter or pension award letter, if applicable
- Year-to-date profit and loss statements and/or balance sheets, if self-employed
- Gift letter if you are using money from parents or relatives to help cover down payment or closing costs
- Landlords name, address & phone number, if you rent
- May also need to show rent/utility payments to document payment history if needed
Depending on the type of home loan you are applying for, and your individual circumstances, you may also need:
Homeowners Insurance Information Required By Lenders
Provide copies of homeowners insurance declaration page or name, address, and phone number of the insurance agent that is insuring home:
- Borrowers who are divorced, lenders are going to require a divorce decree and if paying child support, the lender will require child support documentation
- For borrowers paying alimony support payments, the lender would also need copies of the alimony agreement.
- Divorce decree if applicable
Alimony agreement & child support documentation if applicable.
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Current Minimum Mortgage Requirements For An Fha Loan
Down payment. FHA loans require a 3.5% down payment with a 580 or higher credit score, and funds can come from employers, close friends, family members or charitable organizations. The down payment requirement jumps to 10% with a credit score of 500 to 579.
Mortgage insurance. FHA borrowers are required to pay two types of FHA mortgage insurance. The first is an upfront mortgage insurance premium of 1.75% of the loan amount, typically financed into the mortgage. The second is the annual mortgage insurance premium that ranges from 0.45% to 1.05% of the loan amount, and is divided by 12 and added to your monthly payment.
. You can have a credit score as low as 500 up to 579 with a 10% down payment. Homebuyers making a minimum 3.5% down payment will need a score of at least 580.
Employment. FHA loan income requirements look at the borrowers stability of income and employment for the past two years. Job-hoppers need to explain changes or gaps in employment.
Income. There are no income limits for FHA loans. However, borrowing power is limited to the FHA maximum loan limit cap of $356,362 in 2021, compared to $548,250 for conventional loans in most parts of the country.
Cash reserves. FHA loan qualifications dont usually require cash reserves unless youre buying a two- to four-unit home, or trying to qualify with a lower credit score.
Occupancy. A one- to four-unit home financed with an FHA loan must be your primary residence for at least the first year after buying it.
The 1003 Loan Application Form
The 1003 loan application form, or Uniform Residential Loan Application, was developed by the Federal National Mortgage Association, or Fannie Mae, as a standardized form for the industry. Fannie Mae and its sibling, the Federal Home Loan Mortgage Corp., or Freddie Mac, are lending enterprises created by the U.S. Congress to maintain liquidity in the mortgage market.
Fannie Mae and Freddie Mac purchase mortgages from individual lenders and either hold the loans in their own portfolios or sell them to other entities as part of a mortgage-backed security . By selling consumer mortgage debt to these federally backed entities, lenders maintain the liquidity necessary to continue offering new loans.
Mortgages need to be documented in the way prescribed by Fannie Mae and Freddie Mac. Because both require a Form 1003or its Freddie Mac equivalent, Form 65for any mortgage that they consider for purchase, it is simpler for lenders to use the appropriate form at the outset rather than to try to transfer information from a proprietary form to a 1003 form when it is time to sell the mortgage.
Generally, borrowers have to fill out a 1003 form twice during a mortgage transaction: once during the initial application, and again at closing to confirm the terms of the loan.
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