Get Your Documents Organized And Ready Before Applying For A
Mortgage. As we begin to move from a Buyers Market to a Sellers
Market, dates for Mortgage Commitment and Closing will be playing a bigger roll
in offers submitted on properties. If two offers on a property are similar, the
one with the least time to obtain Mortgage Commitment, and quickest Closing
Date, will most like be considered the stronger offer. This
means that Borrowers need to have the documents needed to obtain a Mortgage
organized and ready. By having the Mortgage documents organized and ready,
Borrowers will be able to meet with their Loan Originator sooner, and have their
loan submitted into processing much quicker. Also the more complete Mortgage
file is the quicker it can be put into process, and the quicker the Borrower
will receive Mortgage Commitment.
You would think that putting the documents together that
I have listed below would be a simple task, but this apparent simple task many
times presents delays and problems. That is why when I Pre-Approve a Borrower for a loan, I tell them that
they need to start organizing the documents that they will need right away,
especially if they plan on purchasing soon. I then go over the list of
documents that they will need for the type of loan that they will most likely
will be applying for. Some documents may differ based on the Loan Program, but
there are some documents that are needed regardless of the Loan Program, such
as:
- One month of paystubs
- W2’s for the past two years
- Bank statements, 1 month for conventional loans, and 2
months for FHA
I
can sort of understand why a Borrower may not have kept paper copies of their
paystubs, or even keep paper copies of bank statements. If a Borrower does not
have bank statements we can get around it by just having the Borrower go to
their bank and getting a bank printout of their account, but paystubs are a
different matter. If they do not keep their paystubs, and cannot get duplicate
ones from work, then we may end up having to wait a full 30 days for them to
acquire them. That may not be a major issue for someone who has plenty of time
to Close, but for someone who has to Close quickly, that could be a big
problem. The documents that I am always amazed the most at, that a Borrower
does not have are W2’s and Tax Returns. I could not even imagine not holding on
to mine for a minimum of 5 years in case of an audit. If a Borrower does not
have W2's or Tax Returns they can get a copy directly from their local IRS
Office, but it still creates a needless delay.
Other documents that are commonly needed with some loan
programs that Borrowers don’t always have handy, and could slow down the loan
approval process are:
- 2-3 years Tax Returns needed for:
- Self-Employed Borrowers
- CHFA Loans
Gift Money Documentation:
- Copy of Gift Check
- Proof of withdrawal
- Proof of deposit
Divorce Decree:
- Proof of receipt of Alimony/Child Support
Payments
Bankruptcy documentation
Certificate of Eligibility (VA Loans)
There are other documents that are sometimes needed, but
these are the most common.
Buying a house can be a very stressful process, but much
of the stress can be eliminated if the Borrower follows the advice of the Loan
Originator that they are working with early in the process. A little time spent
on Getting Your Documents Organized And Ready Before Applying For A
Mortgage, can save many hours of delays and stress during the Home
Purchasing Process, and might even be the difference of having an offer accepted
or not.
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