Last week’s blog we discuss the key professionals in the homebuying process. This week we take a closer look at the forms and paperwork necessary to purchase a home. The mortgage loan application is one of the first steps towards your dream of homeownership.
This mortgage loan application includes several sections that capture information about you, your finances, and details of your potential mortgage. It’s lengthy and at first glance seems complicated, we'll cover each section in a two-part series. You’ll learn about the reasons for each part of the form and why you’re being asked to provide the requested information.
Section I: Type of Mortgage and Terms of Loan
The information in this section should match the type of mortgage and mortgage loan terms that you discussed with your loan officer. For purchases where you haven’t selected a property yet, you can specify the maximum amount you wish to borrow.
Section II: Property Information and Purpose of Loan
If you’ve already selected a house, in this section you will need to provide information about the property, including the address, the year it was built, whether you want to purchase or refinance — as well as other details about the purpose of the mortgage loan you seek.
Section III: Borrower Information
This is personal information required of you and any co-borrower involved (any additional borrower who accepts responsibility for paying the mortgage, such as your husband or wife), including Social Security number, date of birth, marital status, and contact information (street address and telephone numbers).
Section IV: Employment Information
Section V: Monthly Income and Combined Housing Expense Information
In these sections, you need to provide a history of your employment (where you have worked and for how long), your monthly income and your monthly expenses (bills you pay every month) — along with recent paycheck stubs and federal W-2 income tax forms for the last two years. With this information, your loan officer can determine your ability to make regular payments on the mortgage and your capacity to afford the costs associated with owning a home.
Next week we will cover the remaining sections of the loan applications as you move forward in your journey to homeownership.