The liabilities on a loan application are every recurring debt payment and legally enforceable obligation you owe at the time you apply. That means credit cards, car loans, student loans, existing mortgages, child support, co-signed debts, and similar items — not your utility bills or streaming subscriptions. Lenders check what you report against your credit report and other records, so the goal is a complete, accurate list rather than a short one.
What Counts as a Liability
The Uniform Residential Loan Application (Form 1003) sorts liabilities into a handful of categories: revolving accounts, installment loans, leases, mortgage loans on property you already own, and court-ordered obligations.1Fannie Mae. Uniform Residential Loan Application Each one belongs on the form if it applies to you.
Revolving debt. Credit cards are the most common example. For each card, the lender counts the minimum monthly payment — not the full balance — toward your debt-to-income ratio. A $10,000 balance with a $200 minimum shows up as $200 of monthly obligation. Home equity lines of credit work the same way: the payment is based on what you’ve actually drawn, not the full credit line.
Installment debt. Auto loans, personal loans, and furniture financing fall here. You list the monthly payment for each one. Auto leases count too, at the full lease payment.
Existing mortgages. If you already own property with a mortgage on it, that payment is a liability on your new application. Section 3a of Form 1003 asks for the creditor, account number, monthly payment, and unpaid balance for every mortgage on property you own, including your primary residence, investment properties, and vacation homes.1Fannie Mae. Uniform Residential Loan Application The payment includes principal, interest, taxes, insurance, and any HOA dues. If you plan to sell before or at closing, you can mark the mortgage as being paid off; otherwise it stays on the list.
Buy now, pay later plans. If a BNPL plan appears on your credit report, the lender will treat it as an installment liability. Credit bureaus have begun including BNPL transactions in consumer reports, though coverage across providers is still uneven.2Office of the Comptroller of the Currency. Bulletin 2023-37 – Retail Lending Risk Management of Buy Now Pay Later Lending Loan applications ask you to disclose all debts, so an active BNPL plan with remaining payments belongs on the form whether or not it has shown up on your report.
Student Loans Count Even in Deferment
Student loans go on the application whether or not you’re currently paying on them. When the monthly payment on your credit report is zero because the loan is deferred or in forbearance, the lender substitutes a calculated figure. FHA loans use 0.5% of the outstanding balance.3Department of Housing and Urban Development. Mortgagee Letter 2021-13 – Student Loan Payment Calculation of Monthly Obligation Conventional loans backed by Fannie Mae use 1%.4Fannie Mae. Monthly Debt Obligations On a $40,000 balance, that works out to $200 per month on an FHA loan or $400 per month on a conventional loan, even if your actual bill is zero.
Co-Signed Loans and Contingent Liabilities
When you co-sign a loan, you’re contractually liable for it, and federal lending rules treat you as an obligated party.5eCFR. 12 CFR Part 1002 – Equal Credit Opportunity Act (Regulation B) The full monthly payment on a co-signed debt counts as your liability, even when the primary borrower has never missed a payment.
There are narrow exceptions on conventional loans. You can exclude a co-signed debt from your debt-to-income ratio if someone else has made all the payments for at least the past 12 months with no late payments. The lender will want 12 months of canceled checks or bank statements from that person as proof.4Fannie Mae. Monthly Debt Obligations The same 12-month proof requirement applies when you’re on a mortgage note but someone else makes the payments, with the added condition that the person paying must also be obligated on the mortgage.
Debts a court has assigned to another party — a loan your ex-spouse was ordered to pay in a divorce decree, for example — can also be excluded, even if the creditor hasn’t released you from the account. You’ll need a copy of the court order, and the lender will still review the payment history on that debt before it was reassigned.4Fannie Mae. Monthly Debt Obligations
Loans secured by your own financial assets, such as a 401(k) loan where the account itself is the collateral, generally do not count toward your debt-to-income ratio. The lender needs a copy of the loan agreement showing the asset secures the loan. Debt secured by cryptocurrency must be included regardless.4Fannie Mae. Monthly Debt Obligations
Pending lawsuits where you’re a defendant are a contingent liability. There’s no fixed monthly payment, but a potential judgment could affect your ability to repay a new loan, and lenders will ask about active litigation.
Court-Ordered and Legal Obligations
Some obligations never appear on a credit report but still have to be disclosed. Section 2d of the Uniform Residential Loan Application specifically asks about alimony, child support, and separate maintenance payments.1Fannie Mae. Uniform Residential Loan Application Lenders treat these as fixed monthly outflows because they’re legally enforceable; missing them can lead to wage garnishment or contempt of court.
Outstanding tax debt belongs on the form too. If you owe back taxes and the IRS files a federal tax lien, that lien attaches to everything you own, including real estate and bank accounts.6Office of the Law Revision Counsel. 26 USC 6321 – Lien for Taxes A lien can block approval until you resolve the debt or enter a payment agreement.
Unpaid court judgments also count. If a creditor sued you and won a monetary award, that’s a legal obligation to pay a specific amount, and it can lead to wage garnishment or asset seizure if unresolved. List any active judgment, along with a monthly payment amount if one has been set.
Delinquent Federal Debt Is a Hard Stop on Government-Backed Loans
If you’re applying for an FHA, VA, or USDA loan, any delinquent federal debt can block the application outright. Federal law bars people in default or delinquent on federal loans or debts from obtaining new federal loan guarantees.7Office of the Law Revision Counsel. 31 USC 3720B – Barring Delinquent Federal Debtors from Obtaining Federal Loans or Loan Insurance Guarantees That includes defaulted federal student loans, unpaid SBA loans, and other debts to federal agencies.
Lenders check the Credit Alert Verification Reporting System (CAIVRS), a federal database that flags delinquent federal debts. If your name appears there, your application for a government-backed loan will be denied until the delinquency is cleared through repayment, rehabilitation, or a payment plan.8U.S. Department of Housing and Urban Development. Credit Alert Verification Reporting System (CAIVRS)
What You Do Not Need to List
Recurring expenses that aren’t debts don’t belong in the liabilities section. You do not need to report:
- Utility bills: electricity, gas, water, and sewer
- Telecommunications: cell phone and internet service
- Insurance premiums: auto, health, or renter’s insurance
- Subscriptions: streaming services, gym memberships, and similar recurring charges
- Groceries and day-to-day expenses: food, fuel, and household supplies
These affect your budget, but they don’t involve borrowed money or a legal obligation to repay a creditor over time.
Medical debt is a common question. A federal rule that would have removed medical bills from credit reports was vacated by a court in 2025, so medical collections may still appear on your report and factor into underwriting.9Consumer Financial Protection Bureau. CFPB Finalizes Rule to Remove Medical Bills from Credit Reports If you have an active payment plan for medical debt, disclose that monthly payment.
What to Provide for Each Debt
For every liability you list, the application asks for four pieces of information:1Fannie Mae. Uniform Residential Loan Application
- Creditor name — the company or institution you owe
- Account number — the unique identifier for the debt
- Unpaid balance — the full amount needed to pay off the debt right now
- Monthly payment — the required payment each month
You can pull this from recent statements, online banking, or your credit report. Reviewing your credit report before you apply is the easiest way to catch accounts you may have forgotten and confirm that balances match what the lender will see when they pull their own report.
Why Accuracy Matters
Leaving a debt off the application, deliberately or not, has real consequences. During underwriting the lender pulls your credit report and compares it against what you disclosed. Any mismatch will at least delay the file while the lender investigates.
If the omission is discovered after closing, the lender can rely on the loan agreement to demand immediate repayment of the entire balance for breach of the agreement. If you can’t pay in full on demand, foreclosure can follow.
Intentionally providing false information on a loan application is a federal crime. A false statement made to influence a federally related mortgage lender carries a maximum penalty of up to $1,000,000 in fines, up to 30 years in prison, or both.10Office of the Law Revision Counsel. 18 USC 1014 – Loan and Credit Applications Generally Even without prosecution, the lender can rescind the loan and report the misrepresentation, which makes future borrowing harder.