How do I apply for a loan?
Obtaining a loan requires a lot of paperwork and sometimes a lot of fortitude. The savings and loan scandals and the large number of foreclosures in recent years have forced lenders to take a much more critical look at their lending practices. You won't be asked for your blood type, but it's a good bet that you will be asked about everything in your financial history. Loan applications vary, but most require the following information:
Employment history, salary history, and proof of employment. This may require you to obtain a letter from your employer and recent wage stubs. You may be asked for copies of your federal tax returns for recent years or copies of your W-2 statements. While there is no law that requires you to submit this information, the lender has the right to turn down your request for a loan if you refuse to supply pertinent information. If you are using other income to qualify for the loan, such as income from property, child support, or income from investments, you will need to provide proof of these as well.
Credit history. This includes the account numbers of all the credit cards that you currently have. You may be asked to submit year-end statements that reveal how much interest was paid on these cards during the preceding year.
Outstanding debts. These include automobile loans, alimony, child support payments, and credit card debt.
Assets. These include the value of any items you own, such as automobiles, rental property, stocks, bonds, cash, savings accounts, IRAs, retirement accounts, mutual funds, and so on.
Source of your down payment. The lender will want to make sure that you are not borrowing money to make your down payment. (If you are borrowing money, this will be taken into consideration.) If you are receiving a gift from relatives for a down payment, the lender will expect proof that it is truly a gift and that the amount will be forthcoming.
Copyright © 2004 American Bar Association