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Uniform Residential Loan Application Basics

uniform residential loan application

Whether you buy a home in New York or New Mexico, a big city or a small town, you will probably need to complete the Uniform Residential Loan Application. With 10 different sections to fill out, this form may appear complicated and intimidating at first glance. But don’t worry — your lender will likely be the one actually filling it out. However, it’s still important for you to know what goes into a mortgage loan application. In this article, we’ll explain each section to help you better understand the info you’ll need to provide to help your lender complete the URLA and where to turn if you need help.

What is the Uniform Residential Loan Application?

“A Uniform Residential Loan Application, or known in the mortgage industry as a 1003, is the standard that all lenders use to take loan applications,” said Jeremy Schachter, branch manager at Fairway Independent Mortgage in Phoenix, Ariz. This document provides the lender with the basic information needed to approve a home loan. “It’s basically a summary of your entire life,” Schachter added.

Let’s take a look at the different sections in depth.

Section I: Type of mortgage and terms of loan

The first section asks for information on the type of mortgage you are applying for (i.e., VA, FHA, USDA, conventional or other). It also asks for the loan amount, interest rate, term and whether your interest rate will be fixed or variable.

If you haven’t identified the home you want to buy yet, you should enter the maximum you will want to borrow in the amount field.

Section II: Property information and purpose of loan

This section asks for details on the home you intend to buy, including address, year built and a legal description of the property.

Many aspiring homeowners complete Form 1003 before they’ve started looking for a home. For that reason, many areas in this section may be marked “to be determined.”

You’ll also include who will hold the title of the property and where your down payment is coming from, such as savings, a gift from a family member, or help from a first-time homebuyer program.

Section III: Borrower information

The third section of the form should be simple to complete. It asks for basic identifying information of the borrower and co-borrower, such as name, Social Security number, date of birth, marital status and current address.

If you’ve been at your present address for less than two years, the form asks you to provide a former address as well.

Section IV: Employment information

This section asks for employment information for at least the past two years. You’ll need to provide your employer(s) name, address and phone number, how long you’ve been on the job and your position.

Section V: Monthly income and combined housing expense information

This section asks for details on your monthly income and expenses. You’ll want to provide the gross monthly income — your salary before taxes and other items are withheld — for both you and your co-borrower, if any.

If you receive income from other sources — such as self-employment, bonuses or commissions, rental income, interest and dividends, or if you receive alimony or child support — and want the lender to consider this income when approving your loan, you’ll need to provide those amounts as well.

The housing expenses portion asks for present and proposed amounts for rent and/or mortgage payments, insurance, real estate taxes and homeowner association dues.

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Section VI: Assets and liabilities

This section asks about assets (what you own) and liabilities (what you owe). In the assets column, you’ll list other real estate holdings, bank and investment accounts, the cash value of any life insurance policies, businesses you own, the balances in your retirement accounts, automobiles owned, and other items with substantial value.

In the liabilities column, you’ll list all of your outstanding debts, including credit cards, loans, and amounts you pay for alimony or child support. You’ll need to provide the creditor’s name and address, current account balances and account numbers for all of these items. Your total assets minus your total liabilities equals your net worth.

Section VII: Details of transaction

This section lists details of your new mortgage, including the purchase price, closing costs and total cash required to close. If you haven’t yet identified the property you want to buy, many of these items will be estimates.

Your lender will likely fill out most of this section, but be sure to double check the amounts they include here to make sure they agree with your understanding of the mortgage and its terms.

Section VIII: Declarations

In this section, you’re asked to answer questions about any legal problems that may impact your financial situation. There are a number of questions about legal judgments, bankruptcies, lawsuits, foreclosures, delinquent loans, alimony and child support, and whether you need to repay money borrowed for a down payment. It also asks about your status as a U.S. citizen or resident and whether you intend to occupy the property as your primary residence.

Section IX: Acknowledgement and agreement

This section contains a lot of legal wording, but in essence, it’s asking for your signature as an acknowledgment that the information you provided in the prior sections is true and accurate.

Section X: Information for government monitoring purposes

You are not required to complete the final section of Form 1003, but the government asks for these details to help ensure that U.S. housing finance works fairly and meets the needs of all racial and ethnic groups. It asks for information on your ethnicity, race and gender.

If you’d rather not answer these questions, you’ll check a box to say “I do not want to furnish this information.”

Changes coming to the URLA

That is the form as it stands today, but Form 1003 recently got a makeover; the changes will be implemented in 2019.

“Some questions that will be removed are the make/model of your automobile and years in school,” Schachter said. “Other items that will be added are more demographic questions and more detailed questions on your personal scenario like being self-employed and your credit.”

The redesigned form also adds questions about the borrower’s military service and whether the borrower has completed homeowner education or housing counseling. These types of questions are designed to identify borrowers who might be eligible for special financing, such as VA loan or first-time homebuyer programs.

Instead of a standard 10-page form, the redesigned URLA can be tailored to fit the number of borrowers, the type of loan and the type of transaction.

Who fills one out?

Your loan officer will help you fill out the application, and the changes to Form 1003 help make it clear exactly which parts of the form need to be completed by the borrower and which sections need to be completed by the lender.

The redesigned form will have separate sections to be completed by the lender, the borrower, and any additional co-borrowers. Lenders can start using the new forms in July 2019; by February 2020, all lenders will be required to begin using the new versions.

Information you need for the URLA

As a part of the loan application process, your lender will ask for a number of documents in addition to Form 1003. These documents are used to verify the information included on your loan application. This may include pay stubs, statements from your bank or brokerage accounts, W-2s, copies of tax returns, profit and loss statements from your business, information on debts such as car loans, student loans and credit cards. They’ll also ask for documentation to support any other sources of income such as pensions, Social Security or disability payments child support, alimony or bonuses.

While the actual list of documents your lender requests will vary depending on your unique financial situation, the lender’s requirements and the type of mortgage for which you’re applying, it’s a good idea to start collecting these items before you contact your lender to begin the application process. Items such as W-2s, bank and investment account statements, and loan and credit card statements can come in handy when it comes time to provide details on your income, assets and liabilities to the lender to complete Form 1003.

Filling out the Uniform Residential Loan Application may seem tedious, especially since so much of the information you provide will be included in the pay stubs, bank statements and other documents you have to submit anyway. But take your time completing the form and reviewing any information filled in by your lender before you sign — it’s an essential step toward successfully closing on the home you want.

 

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