The full home loan application asks for information on the property you are buying or refinancing, terms of the purchase contract and the employment and financial history of all loan applicants.

The loan application process is much easier if you prepare for it ahead of time. A great deal of detail will be asked about your personal finances, including bank account numbers and balances, current loan amounts and payments, and credit card account numbers, even your income tax returns. To be thorough and precise in your answers, assemble this kind of information before the speaking with the loan officer. The following is a summary of the kinds of information required on the loan application, the documents that may be needed and the questions that you should be prepared to answer.

Details of Purchase Contract and the Property
Because the property is security for the loan, the lender will have an appraisal made of the property, and you need to have the following information available:

• A complete copy of the sales contract, signed by all parties, showing the full names of the sellers and buyers as they will appear on the new deed, the amount of the earnest money deposit and who is responsible for closing costs, origination fees, etc.
• If the house is to be built, or is still under construction, a set of plans and specifications.
• The complete mailing address of the property, its age and its full legal description.
• Name, address and telephone number of the real estate agent and/or the seller of the property who will assist the appraiser in obtaining access to the property. All of this information should be in the purchase contract; if not, consult the real estate agent or the seller.

Personal Information
The loan officer will want the following information for all loan applicants: social security number, age, number of years of schooling, marital status, number and ages of dependents and current address and telephone number. If you have lived at your current address less than two years, be prepared to furnish former addresses for up to seven years. You will also be asked to detail your current housing expenses, including rent or mortgage payments, real estate taxes and insurance You will need the name and address of your landlord(s) or mortgage lender(s) for the past two years.

Employment History and Sources of Income
Your ability to make the regular payments on the mortgage and to afford the costs associated with owning a home are primary considerations in the lender's loan approval process. Required information includes:

• At least two years employment history with employer's name and address, your job title or position, length of time on the job, salary, bonuses, commissions and average overtime pay.
• Recent paycheck stubs and Federal W-2 forms for two years (some lenders may require full Federal tax returns).
• Records of dividends and interest received from investments.
• If you are self-employed, full tax returns and financial statements for two years, plus a profit and loss statement for the current year to date.
• A written explanation if there are gaps in your employment records because of circumstances such as illness or layoffs, or for any other reason.
• The loan officer will have you sign a Verification of Employment (VOE) form. This will be sent to your employer to verify your employment and earnings. A VOE will also be sent to previous employers if you have been on the job less than two years. Many lenders now use a general authorization form that allows them to verify employment and other financial information on the application.

If you are relying on income from other sources, such as rental property, social security or disability payments, child support, etc., you must provide adequate proof that the source is predictable and consistent. Appropriate documents could include canceled checks, copies of leases, certification of benefits, divorce decrees and similar evidence.

Personal Assets
A detailed listing of your personal assets is required on the loan application form. You will need to have the following information available to complete the form:

• All bank accounts, both checking and savings, and money market accounts, with the name and address of the institution, name(s) on the accounts, account numbers and current account balances. Usually this information is taken from monthly or quarterly statements.
• Recent bank statements for at least two months.
• Current market value of stocks, bonds, CDs and other investments.
• Vested interest in all retirement funds, including IRAs and 401(k) plans.
• Face amount and cash value of life insurance policies in force.
• Make, model, year and value of automobiles owned.
• Address and market value of all real estate owned along with the amount of rents collected, the mortgage on the property and the monthly mortgage payments (a profit and loss statement will be required for investment properties).
• Value of other personal property such as furniture.
• As with the Verification of Employment, the loan officer will have you sign Verifications of Deposit (VOD) for each of the institutions (or a general authorization) where you have savings or checking accounts. Differences between the account balances reported by the institution and the balance you give on the loan application have to be reconciled, so be sure you have your correct current balances.

The lender will look for the source of down payment and closing costs and fees. Gifts from a relative, church, municipality or non-profit organization may sometimes be used, but must be verified in writing. If you are providing less than 5% of the sales price, the donor must be a relative and must provide a letter stating the donor's relationship to you, the amount of the gift and the fact that no repayment is expected.

Personal Indebtedness
Liabilities are usually taken directly from your credit report. If you have had credit problems, you should inform the lender. Lenders recognize that unemployment, illness, marital problems or other financial difficulties can temporarily impair your credit rating. You may want to prepare a written explanation of the circumstances regarding the problem to be included with the loan application. The lender must consider such a written explanation as part of the loan analysis. If the problem has been corrected and your payments have been made on time for a year or more, your credit may be judged as satisfactory. Chronic late payments, judgments or loan defaults, however, severely damage your credit standing and may change the type of loan programs available to you.

If you have been through bankruptcy or foreclosure proceedings within the past seven years, be prepared to give full details and copies of applicable documents regarding them.

You will also be asked to explain the details if you are obligated to pay alimony, child support or separate maintenance. Such obligations are treated like debt payments by most lenders and will be part of the underwriting analysis.

You should not take on any new debts after you apply for your mortgage. Doing so could jeopardize the final approval of you loan or prevent your purchase from closing on schedule.

Additional Information
You will be asked to sign a section of the loan application form which contains your certification that the information you have provided is correct to the best of your knowledge; your promise to advise the lender of any material changes in the information; and your consent to (1) verification of the application data, (2) submission of account history to credit reporting agencies, and (3) transfer of the loan or loan servicing to successors to the original lender.

The last part of the application form requests information on the race and gender of the applicants. The Federal Government uses this data to monitor lenders' compliance with fair housing and equal credit opportunity laws. Providing this information is strictly voluntary on your part and has no effect on your loan application. The lender, however, is required by federal law to request the information.

Because of the particular circumstances surrounding a loan application, the lender may require additional information or documentation regarding you or the property after the application has been submitted for approval. Loan officers make every effort to collect all data at the outset, but cannot foresee every eventuality. Requests for additional information may occur and your primary concern should be in responding promptly with the information.

When you have completed your application, you may be asked to pay in advance for the appraisal and credit report.

Preliminary approvals are usually issued within 48 hours or less. Final approvals are only issued after all documents and information (including the title report and appraisal) have been received and verified.

The preceding is an adaptation of Applying for Your Mortgage © 1995 Mortgage Bankers Association of America. The Mortgage Bankers Association of America (MBA) is the national association representing exclusively the real estate finance industry; and it is with their expressed consent that this adaptation appears here. You can contact MBA for additional information at http://www.mbaa.org.

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