If you haven’t gotten a mortgage recently, you might be shocked at the number of documents you’ll need to produce. So even if you’re not thinking of a new home or a refinance right now, start saving paper for the time when you will need it.
Most lenders will require:
- Two years’ worth of tax returns – with all pages included
- Two years’ worth of W-2’s
- At least one month’s worth of pay stubs
- Two or more months’ worth of bank statements from all accounts, with all pages included
- Asset reports for the past 60 days
- Picture identification – as on your driver’s license
They may also ask for details related to derogatory credit events in your past history.
And that’s just the beginning.
You may be asked to provide a financial paper trail to show income and outgo for two or more months, along with details explaining anything unusual. “Unusual” would be defined as any deposits that can’t be accounted for by your employment, child support payments, customary business income, etc.
Should you sell an asset, such as a boat or a motor home, in preparation for coming up with a down payment, be sure that the transaction is well documented. The same goes for gifts from family, income from a “once in a while” job, etc.
If you sell stocks or move money from one account to another, keep every scrap of paper related to the transaction. Be ready to relate those deposits to the withdrawals.
This requirement comes about for two reasons:
- The bank wants assurance that you haven’t borrowed money for your down payment.
- Homeland Security wants assurance that you aren’t laundering money or otherwise abetting a terrorist group.
Keep these records handy so you can supply them quickly should the lender ask for them. A delay in submitting documents will result in a delay in processing your loan. That could put you past the date for a rate lock or past the agreed-upon closing date in your real estate purchase contract.
Specific circumstances will trigger the need for even more paperwork…
You’re divorced. In addition to a settlement agreement, you may be required to provide all pages and schedules of your divorce decree – even if the divorce was 10 years ago.
You’ve been through a short sale. You’ll need to provide the final settlement statement, since many loan programs have a waiting period before you become eligible for a new mortgage loan.
You’ve been through foreclosure. As with a short sale, there are waiting periods. You’ll need to provide a copy of the trustee’s sale date, available through your local recorder’s office.
You’ve gone through bankruptcy. Give your lender the entire package, showing everything related to the discharge and, of course, the discharge date. Again, that discharge date is critical.
You’ve had a loan modification. You’ll need to provide the full loan modification agreement.
You’re not a U.S. citizen. In this case, you’ll need to provide your birth certificate.
Save that Paper!
Saving paper isn’t always fun or convenient, but saving it as you go along is much easier than trying to find documents later on. So set up a filing system, document everything you do related to money, and be ready to provide everything you’ll need when you decide to make a move.
Here at Homewood Mortgage, the Mike Clover Group, we’ll do all in our power to streamline your application and get you into that new home. So call – tell us your situation ahead of time and we’ll be happy to let you know what documentation you’ll need when it’s time to apply.
You can reach us at 469.621.8484.
18170 Dallas Parkway
Dallas, TX 75287