When you apply for a mortgage, your lender will have you complete the Uniform Residential Loan Application (URLA). This form, designed by the federal government and used nationwide, can be daunting for first-timers. Being informed helps relieve confusion, so read on.
The basis of the form
Two government-sponsored agencies, the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac), require the URLA. Fannie and Freddie purchase many loans in the secondary market to hold as assets or to resell to investors as mortgage-backed securities. Therefore, all loans must comply with uniform criteria. The URLA standardizes the gathering of the information lenders need to evaluate borrowers in one loan application.
Completing the application
When filling out the URLA, be prepared to provide the following types of information:
- The address of the property you are buying, the year it was built, and whether you will occupy it or hold it as an investment property.
- The type of loan and terms for which you are applying.
- Your work, contact information, years at your current employer, and years in your industry.
- Your income from all sources, such as salaries, commissions, rental income and others.
- Your current expenditures for housing, such as mortgage payments and property taxes.
- Your assets and debts. Assets include bank accounts, retirement accounts, other real estate you own and the like. Debts include loans, credit card balances and other monthly payments. You’ll also need to provide information on any defaults and/or bankruptcies in your past.
- Ethnicity, gender, and other demographic data.
Supporting URLA documents
After completing the URLA, don’t breathe a sigh of relief. Your work has just begun. The supporting documents you must supply the lender include the following:
- At least two years of tax returns, more if you are self-employed.
- Recent bank and investment statements.
- Pay stubs.
- An employment verification letter from your work.
- If you work on commissions, a letter describing your business and income prospects for the future.
- A copy of your most recent mortgage statement.
- A photocopy of your social security card and driver’s license or state-issued ID.
- A copy of the sales contract on the home.
- A copy of your current mortgage.
- Recent credit card and car loan statements as well as life insurance policies.
A big time-saving tip: Scan and save PDF versions of these documents yourself so that you can easily e-mail them or submit them through a customer portal to the mortgage company.
All those questions!
Brace yourself for the mortgage company to come back to you for more information, more documents and many questions. Don’t take it personally. Loan underwriters are required to vet every borrower thoroughly to minimize the chances of default. This protects both the lender and you, the borrower.
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