Where’s my what?
You just met with your loan officer. You’ve chosen a lender, locked in a rate. He asks, “Where are your docs?” You give him a blank look.
Your income and asset docs. Your lender can’t approve a loan without your help. You need to provide certain specific pieces of paper that verify the information on your loan application.
Doesn’t the bank do that? Isn’t that what I’m paying them for?
Your bank analyzes the documents you present and decides if they support the information on your application.
So what do most banks need when you apply for a loan?
If you’re salaried, you need to supply 2 years W2s and 2 recent consecutive paystubs (assuming you get paid every 2 weeks or twice a month). If you get paid once a week, you need to provide 4 recent consecutive paystubs.
If you’re self-employed, they need 2 years tax returns (personal and business, complete with all schedules).
Insider’s Tip: If you own 25% or more of your business, you are considered self-employed
2 months recent consecutive bank statements for any and all accounts you will be using to pay for your down payment and closing costs. If the account only issues quarterly statements, you should provide the most recent quarter.
Let’s say you’re putting 20% down to buy a house that’s selling for $150,000. Your underwriter needs to see where your 20% ($30,000) is coming from. She also needs to see where your initial contract deposit of 10% ($15,000) came from.
You wrote that check from your checking account, but the rest of the money is tied up in your stock portfolio. You plan on selling some stocks prior to closing and depositing the proceeds into the same checking account.
So your underwriter needs to see 2 months on your checking account and 2 months on your stock account.
You don’t get paper statements anymore? Then you need to provide your underwriter with a printout that clearly shows your name, your account number, the name of the bank, and the activity for the past 2 months.
Your underwriter will pull your credit, but there might be other things you need to document that are not on the credit report. Let’s say you’re renting right now. Your underwriter might ask you for proof you pay your rent on time. One way to prove that is to show 12 months cancelled rent checks. The other way is to get a Verification of Rent form completed by your landlord. Or let’s say you own your current home, but the existing mortgage is with a private lender. This lender doesn’t report your payment history to the three credit bureaus. How is your lender supposed to know you pay your mortgage on time? 12 months canceled mortgage checks.
Other documents your lender might require:
Everyone’s application is different. You might own a vacation home that’s free and clear, but you are still obligated to pay property taxes and insurance on the property. Your underwriter will need to verify those liabilities by asking you for your property tax bill and insurance bill.
Why does all this matter? Because if you apply, lock in a rate, then take 3-4 weeks to get your lender the documents they need, you run the risk of losing your rate lock.
Insider’s Tip: Get your documents together BEFORE you apply so you’ll save you time and money!
To find out what documents Amerifund would need from you, call (888) 650-7316 or fill out this form and someone will contact you.
(c) Copyright Eris Saari 2016