Mortgage Application Anxiety

Mortgage application anxiety is very common. You are definitely not alone when you get that first look at the mortgage application and your blood runs cold.

It appears to a maze of financial data all over the page with no real rhyme or reason to any of it. There are big boxes, little boxes, medium boxes and you must be missing something right?

But I assure you there are only a few basic pieces of information that transform themselves into this massive document. And I’ll show you what they are.

The mortgage application process has really changed over the years. It used to be you sat down with your loan officer and they filled out the mortgage application by hand.

Today, a mortgage application can take place several different ways.

1. In person or face to face mortgage application
2. Over the phone mortgage application
3. Online mortgage application

The in person application is really the old way of completing the application. With all the technology these days, you do not need to sit down in front of the guy to get this done.

And with the internet, you can check them out and learn about their business with the click of a mouse!

You can’t really tell if a guy is a crook just by sitting down with them.

Actually, the crooks prefer that way.

The phone and online mortgage application are pretty much the same because they gather the same information from you. We’ll discuss the online application later.

You may opt for the phone application because you are already on the phone with the loan officer and after they answered all your questions you move on to the application.

The mortgage application contains the same information needed for your approval. Your loan officer has to be able to take the information on the application and run it through the automated underwriting computer.

After taking in the information for the mortgage application, your loan officer can run the automated underwriting in about 10 minutes…and some can do it simultaneously like with the online application . If your loan officer does not have automated underwriting or does not know how to use it, move on to one who does.

Mortgage Application Requirements

The mortgage application is called the Uniform Residential Loan Application form 1003. The mortgage industry calls it the 1003 (pronounced ten oh three).

Mortgage application requirements say there has to be an original signed application in the file for it to close. Some companies use an electronic signature if you prefer and for most mortgage lenders that is acceptable.

You are only required to sign the original or initial 1003. There can be changes to the mortgage application that occur during the process. If anything changes, mortgage lenders require the loan officer or broker to send an updated 1003 to them.

You do not need to sign the updated 1003 it just goes into the file at the lender. You will see the final 1003 at closing and that one you do sign.

Do not ever sign a blank mortgage application. Some loan officers convinced people to sign blank applications by saying “this will get the ball rolling so we can get started and I’ll fill all this in later”. Do not fall for that.

You are not required to close after signing a mortgage application. If you decide to cancel, inform your loan officer. They may not be happy but they can’t force you to close.

Mortgage Application Checklist

The mortgage application checklist can help you get everything in order right away. This can help down the road for approval and processing. If you are trying to answer questions off the top of your head, they may be wrong and that may mean changes or even a denial.

Some things on the application are filled out by the loan officer after talking with you or it’s filled out by the online process after you answered the questions they require like the interest rate, type of loan, term, costs, etc.

This checklist is the information you provide to complete the mortgage application.

1. Names as you want (or already have for mortgage refinancing) on title. However you want your name on title makes it consistent throughout the file. It should be the same as you have on the contract if you are buying.
2. Social security number
3. Address and what type of house (owner occupied, investment, second home)
4. Source of any cash you are bringing to closing like for the down payment. For example, checking/savings or proceeds from the sale of your current home.
5. Date of birth
6. Total years in school
7. How long you have lived at your current address (if it is less than 2 years, then you need your previous address and how long there)
8. Home phone
9. Employer and how long you have worked there. (again if less than 2 years need previous employers)
10. Self employed or not
11. Your title or position at work
12. Business phone
13. Gross monthly income. This is the amount before taxes and any other deductions.
14. Your homeowner’s insurance premium or estimate and your tax amount or estimate.
15. Any HOA dues
16. Your marital status. If you are married, separated, divorced and any child support or maintenance either received or paid.
17. Asset amounts used for closing or reserves. These are usually checking/savings accounts, retirement accounts, life insurance, etc. Any cash you are brining to closing must be documented and listed on the mortgage application. Some assets are only used for reserves which strengthen your file. Your file may need all the assets you can get your hands on or your file may be so strong it needs very little to get an approval. Talk with your loan officer about your asset needs.
18. If you own other properties, have loan balances, rent amount, mortgage amount, and value.
19. Be prepared to answer the declarations. Some of these are bankruptcy and foreclosure questions, obligated to pay child support or maintenance, are you a US citizen, do you intend to occupy this property, etc.

Do not lie about anything on your mortgage application. That is a crime.

Mortgage Application Form

The mortgage application form can look a little different from different mortgage companies. They all have the same information but can be from different software programs.

As long as it has the Form 1003 at the bottom, that is a mortgage application.

Also, some things do not need to be filled out even though there is a spot for it. I know I just told you not to sign a blank application but some things are just not needed. For example, you do not need to complete information about your car.

Everything on the mortgage application is needed for approval and some things are not required for approval like what kind of car you have. As long as you follow the checklist, you will have the information on the mortgage application you need for approval.

The debts on the application form are auto populated from your credit report. So, the liabilities including balances and payments come directly from your credit report.

Mortgage Application Fee

This is a tricky fee that some mortgage companies have morphed into their business model. Not all states allow an application fee so they change the name to a lock in fee or deposit.

There are legitimate fees or deposits at application. An appraisal deposit is often required at application. The appraisal fee has to be paid upfront by the loan officer or broker so for them to require a deposit in case your loan does not close is a legitimate request.

But a lock in fee or application fee is a little suspect especially when they collect it online or over the phone by credit card. Then, you find out it is non refundable. And not only is it non refundable, you can’t charge back on it either.

Yikes!

Some mortgage companies advertise a mortgage and rate that simply does not exist and when they get you on the phone, they get your deposit via credit card. This is really the only thing they want.

They do not actually close loans but collect application or lock in fees and at $500 or $600 that generates cash flow. And it is immediate cash flow, not the kind you have to wait for or work on just to find out the loan won’t close. They don’t want you to close…they just want your deposit.

So, you can see how enticing this is for some crooked companies. To protect yourself, ask for and read the disclosure explaining the fee. Many people just give their credit card information without reading the disclosure.

If they do not have a disclosure or push to get your credit card without it, move on to another company. It may be in the finest of print but read every word and find out their policy should you cancel or it gets denied.

Online Mortgage Application

An online mortgage application is one of the ways you can complete your application. Some people get a little confused when they are asked to enter in their information.

One is for online mortgage rate quotes. This is only for rate and costs quotes. Everyone’s situation is different so to get an accurate rate quote, you have to get some information. It may look like you are filling out a whole application but it is not.

A rate quote does not require a social security number. They ask general questions about your credit, income, loan balances, etc. but no credit is pulled and no mortgage application is in force.

If you are looking for a mortgage quote service, this must be your lucky day because we have one. Just fill out the information and get quotes. Make sure you fill it out completely since the lenders can’t give you an accurate quote (or one at all) if they don’t have all the information.

An online mortgage application has all the checklist requirements including the social security number because your credit will be pulled. This may also get you an instant approval if they have automated underwriting set up with it.

Even though you completed an online mortgage application or a phone application, there still needs to be a signed application for processing and closing. The mortgage company usually sends you the application and you sign it along with all the other disclosures and send it back.

Hope this helps and good luck!

Author: Terri Ewing

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Tagged with: Application Fee • Appraisal Deposit • Appraisal Fee • Checklist • Fee • Mortgage Application • Process • Requirements

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