Explaining the Home Loan Process Part 2: Completing a Home Loan Application Form
Filling out the Uniform Residential Loan application is the first formal step toward a mortgage. Take a look at the form’s purpose, a section-by-section breakdown and the information required for successful completion.
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Buying a home is a multi-step process. Most of us start by researching the world of real estate and comparing our financial options. Next, we take the first formal step toward becoming a homeowner: the loan application. Read on to learn more about this form, why it’s so important and the information you’ll need to complete it.
What Is a Uniform Residential Loan Application?
No matter where you apply for your loan, you will probably fill out the same form. Known as the Uniform Residential Loan Application (or the 1003, after its Fannie Mae form number), this nine-page document provides a lender with the basic information needed to assess a borrower’s qualifications. It will include details about you, your finances and your future property. Lenders rely on this form to assess your creditworthiness and make informed decisions about your mortgage application.
What Information Is Needed?
The Uniform Residential Loan Application asks for a lot of detailed information because it evaluates your ability to repay a mortgage. To complete this form, you’ll need to provide the following:
- Basic personal information, such as your name, address and Social Security number
- Financial details, including your income, assets and debt obligations
- Home type and loan purpose. For example, is it a purchase or refinance? A primary residence or investment property?
- Answers to a series of questions about the property, your funding and your financial history
- Military service information, if applicable
Sections of the 1003 Form
With nine different sections to fill out, the form may appear intimidating at first glance. However, Loan Officers are available to help you complete your application, either over the phone or in person. For example, at Pennymac, a Loan Expert will guide you through the required information, explain the process and ensure an accurate and efficient completion of your form. To facilitate the process, familiarize yourself with the application before your conversation so you’re ready to answer questions about your finances.
Each section of the 1003 form is explained below to help you better understand what goes into a mortgage loan application. To get the most out of this information, open the latest version of the Uniform Residential Loan Application and follow along.
Section 1: Borrower Information
The first section is pretty straightforward. You’ll need to fill in basic information like your name, date of birth, address, telephone number, Social Security number and marital status. If there will be a co-signer on the loan, make sure to record their personal information, too.
If you’ve lived at your present residence for less than two years, you’ll need to provide a 24-month residential living history.
This section will also ask if you’re a United States citizen or a permanent or non-permanent resident alien. You can still obtain a mortgage if you’re not a U.S. citizen as long as you have documentation showing legal residence in the United States.
Section 1b-e Employment and Income Information
Here, you will be required to provide employment and income information, including:
- Two-year employment history
- Employer or business name and position
- Current and previous gross monthly income (what you make before taxes and deductions). Make sure to include bonuses, commissions, rental property payments and freelance or 1099 work.
- Income from other sources such as interest and dividends, Social Security income, pension, etc.
Section 2: Financial Information – Assets, Liabilities and Other Properties You May Own
This section details your current financial health or net worth. The two factors that need to be considered are how much you own (assets) and how much you owe (liabilities). Lenders want to be confident that you have the funds to cover the down payment and closing costs and that you'll be able to manage your new mortgage payments and your existing debt obligations.
To paint a complete picture of your financial health, you’ll need to provide information regarding your assets in sections 2a and 2b, such as:
- Checking and savings account balances
- Retirement accounts
- Investments
- Other property you may own
- Proceeds from real estate property to be sold on or before closing
Next, in sections 2c and 2d, you’ll be responsible for listing information about your liabilities. This includes any unpaid balances and monthly debt payments resulting from:
- Credit cards
- Auto loans
- Student loans
- Child support or alimony
You’ll need account numbers, balances and creditor addresses for all these items. Ensure you have up-to-date information on these accounts before you start the application process.
Section 3: Financial Information – Real Estate
In this section, you’ll provide details about the properties you own, including:
- Property value
- Monthly rental income
- Intended occupancy, i.e., investment, primary residence, second home or other
- Monthly mortgage payments and payments such as taxes and association dues, if not included
- Unpaid balances
- Type of loan
There are areas where you can add information about additional properties if you own more than one. If you’re a first-time homebuyer and do not currently own a property, check the box that says, “I do not own any real estate.”
Section 4: Loan and Property Information
In this section, you’ll detail the loan’s purpose and the property you wish to purchase or refinance. Section 4 can be a bit confusing since many people have not even started looking for a new home when they fill out their mortgage loan applications. As a result, this section will often be left “to be determined.”
If and when you do know the details, you’ll provide information, such as:
- Loan amount
- Loan purpose (purchase, refinance or other)
- Property address
- Occupancy, such as primary residence, second home, investment property or FHA secondary residence
- Whether it’s a manufactured home or mixed-use property
- Potential monthly rental income on the property you want to purchase
- Other new mortgage loans on the property you are buying or refinancing
- Gift or grants you have been given or will receive for the loan
Section 5: Declarations
This section includes questions about your financial history, past or present legal problems or other issues that may affect your financial standing. For example, have you ever declared bankruptcy or gone into foreclosure? This information, in addition to your credit report, will help your lender better evaluate your history and ability to pay off a mortgage successfully.
Section 6: Acknowledgments and Agreements
Read over this section explaining what you agree to when you sign the application. By adding your signature, you agree that the information you provided is true and accurate.
Section 7: Military Service
This section asks questions about your (or your deceased spouse's) military service.
Section 8: Demographic Information
Section 8 asks about your ethnicity, sex and race. Mortgage applications request demographic information to comply with fair lending laws, ensuring equal treatment for all applicants.
Section 9: Loan Originator Information
To be completed by your Loan Originator. This final section includes basic information about the Loan Originator, including:
- The organization’s name and address
- The Loan Originator’s name, phone number, email and signature
- The Loan Originator’s Nationwide Multistate Licensing System (NMLS) number, which tracks their licenses and registrations, identifying them in the mortgage industry
- The Loan Originator’s state license ID, a unique identifier issued to a loan originator by a state regulatory agency
Ensuring Accuracy
Before you sign your mortgage application, carefully review it to ensure it’s complete and accurate. Beware of anyone offering to falsify information to qualify you for a loan. Whether intentional or not, an inaccurate application can be considered fraud. Check carefully that you or the Loan Officer has filled out the following information correctly:
- How much income you earn
- Where you work
- How much debt you owe
- Whether you’ll live in the house or someone else will (loan terms are different for a house that will be your primary residence versus a rental)
Finally, don’t sign any documents that have incorrect dates or blank fields. If someone offers to “fix it later” or “fill it in later,” insist on a correction before proceeding.
The First Page of a New Chapter in Your Life
Filling out a mortgage loan application may not be exciting in and of itself, but it’s an essential step toward owning your new home. Providing your lender with a complete, accurate application helps ensure that you’ll be able to close on the home you want with a loan you can afford. Ready to start moving down this life-changing path? Contact a Pennymac Loan Expert who will help you navigate this first page of your exciting new milestone.
Jump to...
- Explaining the Home Loan Process Part 1: Getting Prepped
- Explaining the Home Loan Process Part 2: Completing a Home Loan Application Form
- Explaining the Home Loan Process Part 3: Working with a Loan Processor and Mortgage Processing
- Explaining the Home Loan Process Part 4: Mortgage Underwriting
- Explaining the Home Loan Process Part 5: The Closing Process
- Explaining the Home Loan Process Part 6: Understanding a Loan Transfer
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Meet Our Contributing Editors
Bradley Thompson and Afton Lambert are Contributing Editors for Pennymac’s consumer content and are exemplary leaders within the mortgage industry space. Both experts take pride in helping our customers achieve and sustain their aspirations of home.
For over 13 years, Bradley has achieved success as a high performer in various leadership roles including consumer direct sales and mortgage fulfillment positions.
With over 10 years of mortgage experience, Afton started her career as a top performing Loan Officer, before transitioning into her leadership role, where she has recruited, hired and trained Loan Officers.
