Mortgage Application

Mortgage application is not just a document containing the submission from a borrower to the lender that asks for a loan against the mortgage of his property with a promise to pay back within an agreed time frame. The mortgage loan process involves huge risks involving both the lender and the borrower. The lender would like to ensure, through the mortgage application, that the borrower would be able to repay his loan without forfeiting his property.

The mortgage application contains the financial details of the borrower with supporting documents to prove his capability to repay the loan within the agreed period. The lender requires these documents to assess and analyze the risks involved in paying the loan. He studies your present and past financial details. Mortgage application is another word for underwriting in mortgaging business. Mortgage application helps the lender to use his formulas and standards to accept or refuse you the loan.

The mortgage application should, therefore, contain the documents establishing your identity supported by your driver’s license and passport, existing loan statement, details about your steady earning history for at least the past two years from the date of application. To prove this, the borrower should append the copies of the letter of employment, stating:

  • current income
  • bonuses
  • commissions
  • allowance
  • tax assessment notices or
  • tax returns provided either by his employer or the income tax department

You should also provide the proofs of all your financial assets including

  • savings
  • investments in mutual funds
  • bonds
  • stocks and shares or
  • other business ventures

In addition to your income record, you also need to provide your credit history in form of the credit reports from the credit rating agencies. Get the copies of your credit reports nearly six months before presenting your mortgage application and study them thoroughly. There may be inadvertent factual errors. Contest them with the supporting documents and get them corrected and incorporated in your credit reports. Your lender may ask for these reports. Even a small correction in your credit report can boost your credit score.