Get Your Docs In A Row!
Before you apply for a mortgage loan you need to gather your financial information and get your documents in a row. Lenders are more picky about what is needed to process a loan and you need to do some heavy work upfront to prepare yourself for the home buying roller coaster ride. Here is the list of documents and requirements you will need for a home loan:
- 30 Days Pay Stubs-If you are paid every 2 weeks you will need 3 pay stubs and if you are paid 2 times per month then you will need 2 paystubs.
- Copy of Social Security Card and Driver’s License/State ID-If you don’t have a copy of your social security card you can get a replacement card at Social Security Administration website. Also, you may need to blow up or enlarge Driver’s License/ ID because it must be legible. Finally, lenders do require both the front and back of both the license/id and social security card.
- Last 2 year’s tax returns with W2/1099 forms-We will need all pages and schedules of tax returns AND ALL W2/1099 forms. We don’t require copies of state tax returns. If you don’t have your tax returns you can visit Internal Revenue Service to request copies of tax return transcripts online or have them mailed to you. Also, if you can’t find a W2/1099 then go to the accounting/payroll department of employer or your tax advisor to request a copy.
- Last 2 month’s bank statements-We need every page of your bank statements (even if they are blank). You can print out online statements but they need to have your name and account number on them. Also, you can visit the bank if they have a location near you and request a printout of activity for the last 60 days. The printout must be signed, dated, and stamped on EVERY PAGE by the personal banker. All large deposits must be explained and backed up with supporting documentation. For example, if the large deposit is payroll and the statement doesn’t specify it is a payroll deposit then we need a copy of your paycheck. Please contact your loan officer if you are going to make a large cash deposit or you need to know how to document a previous large deposit so that he may walk you through the required documentation.
- Contact information for landlord, Realtor, home insurance agent, and attorney whichever is applicable. Please let your landlord know that you may be buying a home and that somebody from the mortgage company will contact him to verify that you have made on-time rent payments. You are not required to use a Realtor to buy a home but there are many good reasons to use a real estate agent. If you don’t have one, we can help you find you a Realtor in the FirstHomeBuyer Network. Next, you should contact home insurance agents for rate quotes and rates may be higher if you live in hurricane or tornado alley, flood zone, earthquake zone, or other area with potential environmental hazards. Finally, you will need an attorney or split an attorney with the seller to assist you with the legalities of purchasing a home.
- Credit Report-You should get your credit report with 3 scores and review the report for discrepancies and errors prior to mortgage application if possible. After you have reviewed your credit report and everything has been updated and corrected then you need to re-run your credit with a mortgage lender and have them review the report and scores to determine if your credit will qualify for the first time home buyer program. You may need to write a letter of explanation for inquiries, late pays, and other adverse items such as a judgement or bankruptcy. You may be able to overcome a credit hurdle and get a loan approval if you can satisfactorily explain the extenuating circumstances.
- Debts/Liabilities-Generally, lenders will look at auto, personal, and student loan debts as well as minimum monthly credit card and child support/payments when calculating your monthly debt. Some programs may not count a loan where there are less than 10 months of payments. Also, if you have student loans and they are in deferment for 1 or more years then the payments may not count against you. You should consult a loan officer if you are unsure about how your monthly debts may affect your ability to qualify for the first time home buyer program so you can take whatever actions necessary such as paying off some debt.
Now, that you are ready to apply for the mortgage loan, you need to be prepared to get the paperwork and information to your loan officer. Today, many home loans are processed electronically via email, fax, and websites. You can review and E-Sign most mortgage disclosures online but you will need to print out some of the disclosures and I advise you to get a good cheap laser printer which you can get for $50-$60 to print out your documents. Also, you may need a scanner to scan these documents as well as the other supporting documentation such as pay stubs, bank statements, etc. Make sure your documents are in PDF or Adobe format not picture or other formats which creates large files and it makes it more difficult for lenders to view and handle your documents. All documents should be clear and legible and nothing should be cut off. Otherwise, you may be requested to send the documents again which is a big hassle. If you are having trouble emailing or faxing documents and/or don’t have a scanner then you will need to send the documents through some type of priority mail to track them.
I know these requirements seem “picky” but believe me if you do a good job of getting documents and information to your loan officer then it make the process much easier so you can close on your new home. The moral of the story is please get with your loan officer early in the home buying process so he can walk you through what documents are needed to process your loan and get those documents as well as any other requested information to him and you will be a happy homeowner. Contact us today at 847-516-5743 or email firstname.lastname@example.org to Get Your Docs in a Row!