What Is the 1003 Mortgage Application?

The 1003 mortgage application, also known as the Uniform Residential Loan Application, is the standard form nearly all mortgage lenders in the United States use. Borrowers complete this basic form—or its equivalent, Form 65—when they apply for a mortgage loan. Though some lenders may use alternative forms or simply accept basic information from the borrower about their finances, the property type, and its value, the vast majority of lenders rely on the 1003 form.

The 1003 Loan Application Form

The 1003 loan application form, or Uniform Residential Loan Application, was developed by the 澳💟𝓰洲幸运5官方开奖结果体彩网:Federal National Mortgage Association, or Fannie Mae, as a standardized form for the industry. Fannie Mae and its sibling, the 澳洲幸运5🍨官方开奖结果体彩网:Federal Home Loan Mortgage Corporation, or Freddie Mac, are lending enterprises created by the U.S. Congress to maintain liquidity in the mortgage market.

Fannie Mae and Freddie Mac purchase mortgages from individual lenders and either hold the loans in their own portfolios or sell them to other entities as part of a 澳洲幸运5官方开奖结果体彩网:mortgage-backed security (MBS). By selling consumer mortgage debt to these federally backed entities, lenders maintain the liquidity necessary to continue offering ne🐭w loans.

Mortgages need to be documented as prescribed by Fannie Mae and Freddie Mac. Because both require a Form 1003—or its Freddie Mac equivalent, Form 65—for any mortgage that they consider for purchase, it is simpler for lenders to use the appropriate form at the outset rather than to try to transfer information from a proprietary form to a 1003 form when it is time to sell the mortgage.

What Information Is Needed on the 1003 Form?

The 1003 form is intended to collect all the information that a mortgage lender needs to determine whether a potential borrower is worth the risk. Though some lenders do not require employment information to consider a new mortgage, the 1003 form calls for at least two years of employment history, including monthly income.

The 1003 form also requires the borrower to note any other household income, as well as provide an itemized list of their assets and liabilities.

A borrower’s assets include an꧒ything that could he💙lp cover or liquidate loan payments:

• Life insurance policies
• Checking and savings accounts
• Stocks, bonds, mutual funds, or other investments
• IRA, 401(k), or similar retirement accounts

The borrower also needs to in🅺form lenders of any ot🐎her debts for which the borrower may be liable (in addition to mortgage payments), such as car loans, credit card debt, student loans, or open collection accounts.

If the borrower owns any other property, as either an investment or a second home, the 1003 form requires the disclosure of these assets and any mortgages tied to them. In addition, the 1003 form requests information about the property that the borrower wishes to buy with the new mortgage.

1003 Application Example

Th⛎e 1003 mortgage application, or Uniform Residential Loan Application, was redesigned i🎀n 2021. It currently consists of nine sections, as follows:

• Section 1: Borrower Information: This includes your personal, employment, and income information.
• Section 2: Financial Information—Assets and Liabilities: Here, you list your savings and investments (including financial institution names and account numbers) and any outstanding debts and other financial obligations, such as alimony or child support.
• Section 3: Financial Information—Real Estate: This is where you list any other properties you currently own and what (if anything) you owe on them.
• Section 4: Loan and Property Information: Here, you describe the property for which you are seeking a mortgage. If it’s a rental property, the form asks how much you expect to receive in monthly rent.
• Section 5: Declarations: This page asks a series of questions about the property, how you are paying for it, and other aspects of your finances.
• Section 6: Acknowledgments and Agreements: This is the page that you sign, attesting that the information you’ve supplied is accurate and authorizing the lender to perform a credit check and other inquiries.
• Section 7: Military Service: If you currently serve or previously served in the U.S. armed forces (or had a deceased spouse who did), you would note that here.
• Section 8: Demographic Information: This section asks for your ethnicity, race, and gender. Federal law requires that these questions appear on the application, but they are optional for the applicant, and you can indicate that you do not wish to answer some or all of them.
• Section 9: Loan Originator Information: This is a section that the lender must complete.

The Bottom Line

Completing Form 1003 can be a little time-consuming, but it's a necessary part of the mortgage progress. Understanding what's included on this form and why it's required can make navigating homebuying easier. Before moving ahead with this step, however, it may be helpful to check your credit reports and scores so you have a better idea of how likely you are to qualify for a mortgage loan.