Mortgage Loan Application

Posted by  on Apr 16, 2009
If you are interested in a mortgage loan, you will have to fill out a mortgage loan application. The information you provide on the loan application will be verified by a credit report requested by the lender. As with employment and deposit information, differences between your figures and those on the credit report will raise questions and may delay the approval of your loan. It is to your advantage to have data correct, right prior to filling out the loan application.

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. Provide 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 underwriting analysis. If the problem has been fixed and your payments have been made on time for a year or more, your credit will probably be judged as satisfactory. Late payments, judgments or loan defaults, however, severely damage your credit standing and may prevent you from obtaining the financing you need to complete the purchase.

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

The final part of the application 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 on your part and has no effect on your loan application. The lender, however, is required by federal law to request the information. Under Federal Regulations, this lender is required to note race and sex because of physical observation or surname.

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 are not necessarily bad omens and your primary concern should be in responding promptly with the information.
Based on the application, the loan officer may be able to pre-qualify you, but cannot approve the loan. The lender’s underwriters do that after all documents and information have been received.

After the loan application has been completed, it will be forwarded to the lender's loan processing department and then to an underwriter, where the decision to approve or reject the loan will be made. Loan processors send out Verifications of Employment and Deposit and order the credit report, property appraisal and other documents.


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