What information will be needed for the application (and how it's kept private)

Anything you submit over our website is 100 percent, fully secure. And we never, ever share it with anyone except by permission -- that is, if you're giving us information you want us to use to get you the best loan, we use that information to tell mortgage lenders about you and convince them to loan you money. In turn, those mortgage lenders are bound by federal law to keep your information secure.

Here is a list of the information mortgage lenders will use to consider your loan application.

For all loans

Social Security Number
- For borrower and co-borrower if any

Employment History
- For the last two years, employment dates, addresses, salary
- Current pay stubs or W-2 forms

Check and Savings Accounts and Certificates of Deposit
- Location of bank accounts, account numbers and balances
- Address of bank if out of town
- Last 3 months' statements

Stocks, Bonds, and Investment Accounts
- Broker's name and address, description of stocks, bonds, etc.
- Last 3 months' statements or copies of stock certificates

Life Insurance Policies
- Insurance company, policy number, face amount, cash value, if any

Retirement Plan
- Approximate vested interest value
- Copy of latest statement

Automobiles
- Make and model of automobiles, their resale value

Other Assets
- Market value of personal and household property

Liabilities and Other Non-Mortgage Debt
- Creditors names, addresses, account numbers
- Monthly payments and balances

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Other income information you may need

If you're self-employed
- Two years tax returns, profit and loss statements, both company and personal if separate
- Current balance sheet and profit and loss statement if more than two months into the new fiscal year, signed by CPA

If you have income from:
• Commission
• Overtime
• Bonus
• Partnership
• Rental property
• Trust
• Notes receivable
• Interest/dividends

You'll need two years' personal federal tax returns

If employed in family business
Personal federal income tax returns and all schedules for the past two years

If divorced or separated
- Complete executed divorce decree and settlement agreement
- Payment history of alimony/child support over the past 12 months, if it is a financial obligation
- If you choose to have this be considered as part of your income (you don't have to), be prepared to provide 12 months canceled checks or bank statements reflecting income deposits

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If you own real estate

- Name and address of all mortgage lenders for the past 24 months, account numbers, monthly payments and balances

If you've sold your home but not closed
- A copy of the sales contract

If you've sold your home, closed, and you will use the proceeds for your new down payment
- A copy of the HUD-1 Uniform Settlement Statement

If you rent

- Name, address and phone number of landlords for the past 24 months

If you're buying a home

- Purchase sales contract or offer to purchase and all addenda
- Furnish contract with original signatures of buyer and seller

If a source of your down payment is a gift
- Name, address and relationship of donor
- Gift funds will be verified in both the donor and recipient's accounts
Note: Not all loan programs allow gifts to be part of your down payment.

For FHA Financing
- Evidence of Social Security Number and photo identification

For VA Financing
- DD214 and Certificate of Eligibility

For Construction/Perm Loan
Signed construction with cost breakdown, builder plan and specifications

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Debt to Income Ratio

Your debt to income ratio is simply a way of determining how much money is available for your monthly mortgage payment after all your other recurring debt obligations are met.

Debt limit
There is generally a debt limit associated with each type of loan, such as a 28/36 qualifying ratio for a conventional loan. These qualifying ratios are guidelines. An excellent credit history can help you qualify for a mortgage loan even if your debt load is over and above the limit.

Understanding the qualifying ratio
Typically conventional loans have a qualifying ratio of 28/36. Usually an FHA loan will allow for a higher debt load, reflected in a higher (29/41) qualifying ratio.

The first number in a qualifying ratio is the maximum percentage of your gross monthly income that can be applied to housing (including loan principal and interest, private mortgage insurance, hazard insurance, property taxes and homeowners association dues).

The second number is the maximum percentage of your gross monthly income that can be applied to housing expenses and recurring debt. Recurring debt includes things like car loans, child support and monthly credit card payments.

For example:
With a 28/36 qualifying ratio:
• Gross monthly income of $3,500 x .28 = $980 can be applied to housing
• Gross monthly income of $3,500 x .36 = $1,260 can be applied to recurring debt plus housing expenses

With a 29/41 qualifying ratio:
• Gross monthly income of $3,500 x .29 = $1,015 can be applied to housing
• Gross monthly income of $3,500 x .41 = $1,435 can be applied to recurring debt plus housing expenses

Simply guidelines
Remember these are just guidelines. We'd be happy to pre-qualify you to determine how large a mortgage loan you can afford. We look forward to helping you buy your dream home.

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Portions Copyright © 2007 a la mode, inc.