1003 Application - The first step in the official loan approval process; this form is used to record important information about the potential borrower necessary to the underwriting process.
The 1003 is the first step in the loan process that includes the information about the borrower and property. The 1003 is a expanded financial statement to analyze the borrowers ability to support a home loan.
There are five types of mortgages that the 1003 is used for:
- Other (Lot and Construction Loans typically fit into this category)
It is crucial to have as much and the most accurate information available for your mortgage broker when you are applying for a loan. Every blank on the 1003 is there for a reason and this is why your mortgage professional will ask you so many questions in the process.
The Uniform Residential Loan Application is also known as Fannie Mae Form 1003 or simply the "1003" (pronounced ten-oh-three). Your lender will help you fill out this standard mortgage application. Everyone who applies for a mortgage must complete this application, which includes items such as your income, assets, and a description of the home you plan to buy or refinance.
Not providing the correct information on the 1003 can hurt you in the long run.
Eventhough the Uniform Residential Loan Application was designed by Fannie Mae, it is widely accepted in the mortgage industry. Even nonconforming lenders whose loans are not sold to Fannie Mae would use this application.
1003: The Loan Application - The Uniform Residential Loan Application is commonly referred to as the 1003 (ten-oh-three) throughout the mortgage industry. When the loan application is completed accurately, the data obtained provides sufficient information for the underwriter to make an informed decision about the borrower(s).
The application is divided into sections to make it easier to complete and understand. They are as follows:
- Type of Mortgage and Terms of Loans
- Property Information & Purpose of Loan
- Borrower Information
- Employment Information
- Monthly Income & Combined Housing Expense Information
- Assets & Liabilities
- Details of the Transaction
- Acknowledgement & Agreement
- Information for Government Monitoring Purposes
Type of Mortgage & Terms of Loan
This section identifies the loan program requested and the term of the loan in months.
Property Information & Purpose of Loan
This section identifies the subject property’s common address and legal description including the year the property was built and the number of units within the property. The purpose of the loan and the occupancy status are included in this section. The section also addresses other informational items such as whether the loan is a construction loan, construction permanent loan, or a refinance loan. Finally, this section includes the name and manner in which the title is held, the source of the down payment and the settlement charges.
The Borrower Information contains all of the personal information of the primary borrower and co-borrower. The information needed to complete this section includes the following:
Social Security Number
Years of Schooling
Number of Dependents and Ages
Former Address if residing at Current Addresss less than 2 years
If there is a co-borrower this information will need to be supplied as well.
- D. Year Built -- The year the subject property was built
- E. Purpose of the Loan -- The reason you are applying for the mortgage --(1)Purchase or (2)Refinance
- F. Property Will Be -- (1)Primary Residence -- Borrower will live in the property. (2)Secondary Residence -- Borrower will use the property as a vacation home and it will NOT produce income. (3)Investment -- The borrower will NOT occupy the subject property; it will be used as an income producing property.
G. Complete this Line if Construction or Construction-Permanent Loan
- Year Lot Acquired -- The year the lot was purchased
- Original Cost -- The purchase price of the lot
- Amount Existing Liens -- Total balance of ALL mortgage liens on the subject property
- Present Value of Lot -- Present market value of the lot
- Cost of the Improvements -- The dollar amount of the construction costs for the proposed new home
- Total (a+b) -- (a)Present Value of Lot + (b)All the Cost of Improvements
L. Estate Will Be Held In -- Indicates how estate will be held.
- Fee Simple -- Indicates an estate under which the owner(s) is entitled to unrestricted use of the property.
- Leashold -- Indicates an estate in real property wherein the mortgagor does not actually own the property, but rather has recorded a long-term lease; the expiration date of the lease should also be included in this section
IV. Employment History
This section is designed to identify at least a two-year employment history for the borrower(s). It indentifies potential factors like stability, tenure, and the line of work of the borrower(s).
If you would like us to assist you in completing the 1003 application over the phone, give us a call at the number listed at the top of the page.
The 1003 is the starting point for the entire loan process. Wherever you go to apply for a loan, be it at your local bank, or with a mortgage broker, or even on the internet, all lenders insist on a completed 1003 application. It is the standardized form designated by Fannie Mae and is a pre-requisite for a real estate loan.
K. Source of Down Payment -- The source of the funds the borrower(s) is using for the down payment and/or closing costs on the subject property loan. These funds can be personal funds, gifted funds, etc.
Information needed in this section is as follows:
- Borrower's Name -- Full name with middle initial including Jr. or Sr. if applicable
- Social Security Number -- Borrower's Social Security Number
- Home Phone Number -- Borrower's phone number at their present address
- DOB -- Date of birth in MM/DD/YYYY form
- Yrs. of School -- The number of years of education the borrower has completed in whole numbers
- Married, Unmarried, or Seperated
- Dependents -- The number of dependants and their ages
- Present Address -- The complete property address where the borrower currently resides. A ful two-year residence history is needed
- Own or Rent -- Does the borrower own or rent at the present address or any other addresses in the 2-yr residence history
- The borrower's complete mailing address if different from the present address
- Mortgage Applied For -- Type of Mortgage Requested
- Agency Case Number -- FHA, VA or USDA/RHS Case Number
- Lender Case Number -- Lender's Internal Case Number
- Amount -- Dollar Amount Wanted
- Interest Rate -- Rate the Borrower Expects to Receive
- No. of Months -- Term of the Loan in Months
- Amortization Type -- Either Fixed Rated, Graduated Payment Mortgage(GPM), Adjustable Rate Mortgage(ARM), or Other
- A. Subject Property Address -- The property address that will be secured by the mortgage loan. If the property address is not known, put TBD (To-Be-Determined)
- B. No. of Units -- The number of units contained within the subject property
- C. Legal Description of Subject Property -- The method of geographically identifying the subject property; see preliminary title commitment or purchase contract for legal description[/*]
J. Manner in which title will be held -- The type of tenancy.
- Joint Tenants -- An ownership of a property by 2 or more individuals who have equal, undivided interest in the subject property
- Tenants in Common -- An ownership of a property by 2 or more individuals, each of them having an undivided, but not necessarily equal, interest in te subject property
- Single Tenant -- The ownership of a property by one individual.
- Name and address of the employer -- A full two-year employment history is needed
- Self-Employed -- Mark here if the borrower is self-employed
- Yrs. on the Job -- The length of time the borrower has worked in their current line of work in years and months
- Years employed in this line of work -- Length of time in the current profession in years only
- Position -- Current job title and position
- Business Phone -- The phone number of the borrower's employee, not a cell phone unless the borrower is self-employed
- Other Income -- If the borrower has a second/part-time job and they are using the income for purposes of qualification, they must included a 12-month history and be able to demonstrate the income will continue.
H. Complete this line if this is a refinance loan
- Year Acquired -- Year the subject property was purchased
- Original Cost -- The purchase price of the subject property
- Amount of Existing Liens -- The total balance of ALL the mortgage liens on the property
- Purpose of the Refinance -- (1.) No cash-out rate/term -- The borrower is refinancing the subject property to include the payoff of existing mortgage(s), the closing costs, and/or prepaid items/reserves with zero net proceeds to the borrower at closing.
(2.) Limited cash-out rate/term -- The borrower is refinancing the subject property to include the payoff of the existing mortgage(s), the closing costs, and/or prepaid items/reserves and receives industry acceptable cash at closing that is usually less than 2% of the loan amount.
(3.) Cash-out -- The borrower is refinancing the subject property to pay off the existing mortgage(s) for the subject property, to pay any closing costs associated with the loan, and/or to receive additional cash proceeds at closing for any personal or business matters.
I. Title will be held in what name(s) - The name(s) of the individual(s) who will be vested in title to the subject property
III. Borrower Information
This section indetifies information about the borrower(s) such as names, social security numbers, and at least a two-year residence history. This section falls under the regulations of the Equal Credit Opportunity Act (ECOA). When concerning martial status, te borrower may only be asked, "Are you married, unmarried, or seperated?" In a community property state, the applicant may further asked, "If unmarried, are you single, divorced, or widowed?"