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The general residential loan application for a home follows a standard process for most major lenders. In fact, for first-time homebuyers, the forms and rules are dictated by the federal government. The document is known as the Universal Residential Loan Application. Lenders just customize the paperwork for their personal appearance and letterhead for the most part. Getting an application is easy. One can either download it from a lender if available on the Internet, or obtain a hard copy in person or by mail. The filling-out process basically follows the instructions on the form. The application paperwork is designed to collect as much information as possible to identify the borrower and his past financial activity as well as verify information provided as accurate. Once validated, the information can then be used by a loan officer and an underwriter to determine the risk involved in the requested loan.
Residential Loans - Mortgage, Construction, Home Equity,  Investment
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Typical criteria requested on the application will include the age of the borrower(s), identification via government-issued documentation, last known addresses of residence, education levels, income earned, current employment and employer location, and assets as reported in bank statements or brokerage reports. As noted earlier, the intent to purchase agreement or sales agreement is required as well since this has all the details the lender needs about the property involved. Residential loan applications don't come cheap because they require a bit of work to process and review by multiple lender staff. As a result, many lenders charge fees to recover these costs from the applicant. However, the fees are generally not collected unless the loan is approved. The fees get built into the loan package as a small percentage of the total amount requested. So, if a borrower applies for $200,000 then a fee of $2,000 will be added at 1 percent, creating a total loan of $201,000. Some fees have to be paid up front. This can include the credit report fee as well as the application or appraisal fees. While you can bring a credit report with you to show where you got your liability and debt numbers from, the lender as practice will still run their own credit report on you which incurs an expense. Applicants should bring all their paperwork with them to the loan meeting with the loan officer, even if the information has already been provided on the form. Doing so allows the loan officer to perform the documentation verification on the spot rather than the application being put on pending status until all the necessary documents are provided. Various application checklists exist on the Internet as well as with lender information packets to remind borrowers of what to bring. The loan officer will continue to review the loan package until everything is complete and documented. Then he can package the loan application for initial, secondary and underwriter approval. The initial review is by the officer. In this phase he will review the package and determine if the borrower is viable or basically a waste of time for the lender. If determined to not be even a potential loan, the officer has the power to stop the application on the spot and just tell the borrower it's a no-go.
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What to know before you apply
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