How to prepare for your next mortgage application.

Many people I speak with dread the gathering of documents. Use this checklist, and it will be much easier.
 

Remember that every lender may have slightly different requirements. When Automated Underwriting is run, a list of documents will be requested “per current guidelines.” The human underwriter may always ask for additional documents.
 

      Legible copy of driver’s license for all borrowers. If it is expiring before you close, renew it now.

      Proof of Income:

a.       If employed:

                                                               i.      Bring two years W-2’s.

                                                             ii.      Most recent months pay stubs. If you are paid weekly, that would be four.

b.      If self employed, commissioned, own rental property, have partnership income,  or will use asset income, bring:

                                                               i.      Two years Federal Tax returns, all schedules, including K-1’s.

                                                             ii.      If you haven’t filed your taxes, bring the extension form.

                                                            iii.      In most cases, the most recent two years income will be averaged.

c.       If relying upon alimony or child support:  The income must continue for a minimum of three years after closing to be included.  Proof of receipt will be required for 3, 6, 9, or 12 months, depending upon the lender. If this income has been received for less than 12 months, you may not receive 100% credit.

      Show the money (down payment):

a.       If purchasing, bring most recent bank statement(s) showing sufficient funds for down payment, closing costs, and escrows. Whether you need more than the most recent statement will depend upon your loan type. Ask your lender.

b.      If refinancing, even for a loan where you will bring no money to closing or receive money back, you’ll need a most recent bank statement, all pages.

c.       TIP: Be sure to look at the “deposit” section of your statements. If there are non-payroll type of deposits, you’ll have to show a paper trail to prove those deposits were not “borrowed.”

d.      If you are receiving a gift for all or part of the down payment, your lender will have a “gift” form letter for the donor to complete.

      Citizenship: if you have a green card or visa, speak with your lender first. They will want to know the expiration date and type of visa.

The above are the basic items. You’ll also be asked for the following:

      If purchasing:

a.        A copy of the fully executed contract.

b.      Copy of the earnest money check and proof that it has cleared your account.

c.       If you are using the equity from the sale of another property for down payment, bring the fully executed contract. You will also need the HUD1 Closing statement at a later date.

      If refinancing:

a.       A copy of your most recent mortgage statement and Home Equity Line of Credit or second mortgage statement.

      The name and contact information of your closing attorney.
 

      The name and contact information of your Home Owners Insurance Agent.
 

With the above information ready, you will make a mortgage loan officer and their processor very happy.