What Are Assets & Liabilities on a Home Loan Application?

Your assets must exceed your liabilities to win home loan approval.
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A home loan application, more commonly called a mortgage loan application, is a specialized document that every lender requires its borrowers to complete. Using the information contained in the application, a mortgage lender builds a file that will be examined and then eventually approved or disapproved for funding. A mortgage borrower's assets and liabilities are two key components of any home loan application.


Home Loan Assets

Mortgage lenders generally require their borrowers to fill out a form published by the Federal National Mortgage Association: the Uniform Residential Loan Application, commonly called Fannie Mae Form 1003. Mortgage loan applicants must list their assets and liabilities in Section VI of the form. Assets included for mortgage lending purposes include any down payment, cash money, checking and savings accounts, and stocks and bonds. Real estate, automobiles, retirement account balances, and the net worth of a business can also be counted as assets on a home loan application.


Home Loan Liabilities

Liabilities listed on Fannie Mae Form 1003 include all monthly loan payments, present mortgages, alimony, and child support or maintenance payments. Job-related expenses, such as for child care and union dues, are also counted as liabilities on the form. On a home or mortgage loan application, liabilities are subtracted from assets to determine net worth for lending approval or disapproval purposes.


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