- Social Security number
- Date of birth
- Present address and address history
- Present employer and employment history
The application will also inventory your available liquid assets (checking, savings, retirement etc) as well as your “documentable” income (W2′s + pay stubs… or full tax returns for the self-employed—we’ll get to this later).
Nothing can really happen without a loan application. Without the official application, a loan officer can only make assumptions, which is never ideal. A complete mortgage application allows the mortgage professional to see exactly what will be underwritten, and therefore will allow him to set your expectations about what programs and pricing will be available to you and what your best options will be.
Once the application is received, the loan officer will pull a credit report that will take a snapshot of your current debt obligations. The associated credit score will also give him a sense of your relationship to that debt and how you are managing it.
With this information, we can now determine what size loan the borrower would qualify to borrow. This amount is mostly based on a “debt to income ratio” calculation, where we make sure the borrower does not exceed a certain amount of monthly debt payments (including the new mortgage obligation). We determine what monthly payment would be the maximum allowable, and based on the available mortgage rate, we determine what size loan this would translate to.
The borrower is now pre-qualified for a real estate mortgage for a refinance or purchase!
NOTE: A mortgage application is in no way a commitment or obligation on the part of the applicant, and although some lenders charge an “application fee” this fee is rare, and it should be very easy to find a lender who will take your application for free. Applying with a lender doesn’t obligate you to take out a mortgage, nor does it obligate you to work with that lender.
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Next Step: Documentation to Initial Underwriting