Mortgage Application FormApplication form for mortgages
Whilst some creditors may use alternate methods or just agree to provide fundamental information about borrowers' identities, object types and values, the overwhelming majority of creditors trust Form 1003.
In general, Form 1003 is filled out twice during a mortgage transaction: once during the first application and once at the time of conclusion to validate the conditions of the mortgage. Certain creditors allow debtors to fill out the form at home, while others help debtors in person or by telephone. Both cases require a prospective debtor to be able to understand the 1003 file and the information needed before filling in the form.
What's the 1003 for? Fannie Mae, the Federal National Mortgage Association, has designed the application form for 1003 loans, also known as the Uniform Residential Loan Application, as a standardised form for the sector. Mae and her siblings, the Federal Home Credit Mortgage Corp. or Freddie Mac, are congressional credit companies that help sustain mortgage solvency.
Such companies buy mortgage-backed securities from individuals and keep the credit in their own portfolio or resell the credit to other companies under a mortgage-backed securities (MBS) agreement. The sale of mortgage debts to these state-guaranteed units gives creditors the necessary cash to offer new credit. Hypothecaries must be recorded as prescribed by Fannie Mae and Freddie Mac.
Because both companies need to use Form 1003 or Form 65, its Freddie Mac equivalents, for every mortgage they consider for sale, it is easier for creditors to use the appropriate form from the start than to try to move information from a proprietary form to a 1003 when it comes to selling the mortgage.
Form 1003 contains all the information a mortgage creditor needs to know whether a prospective debtor is willing to take the credit or not. Information about the borrowers' identities is also included. Whereas some creditors do not need job information to consider a new mortgage, Form 1003 demands that up to two years of job histories be submitted for each borrowers.
Form 1003 also asks a debtor to declare the entire amount of his/her personal salary and periodic expenditure. As well as this information, the form will require a detailed listing of the borrower's current and future financial position in order to establish whether he can make mortgage repayments on a quarterly basis. Borrowers comprise all those financial instruments that could be used or wound up to meet credit obligations, such as current and deposit accounts, equities, loans, mutual or other investment trusts, IRAs, 401(k) or similar annuity deposits and assurance policy.
Creditors must be conscious of all liabilities for which the debtor can be held responsible in excess of his mortgage payment, such as auto credits, bank cards, students' loan or open collections account. In the event the Mortgagor possesses another real estate, either as an initial or second home, Form 1003 will require the discovery of such properties and all related mortgage claims.