What You'll Need At Loan App.
What You'll Need At Loan App.
Because of the whole mortgage mess, lenders have come under extreme scrutiny and government oversight. This has created the requirement of meticulous underwriting standards that everyone (including the underwriters) will agree requires painstaking detail that would almost seem unnecessary. This means it will require your cooperation in seeking financing in today's lending climate; even the most credit-worthy customers. There is no way around these requirements and there are no shortcuts, as burdensome as the list may seem.
The following is what you can expect to provide:
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Copy of recent pay stub(s) for a complete 30 day period. If you are paid every 2 weeks, then 3 pay stubs. Your name and the company name must appear on the pay stub
W-2 Forms for past 2 years
Complete copy of personal tax returns, which includes all schedules
Complete copy of business or corporate tax returns with all schedules including K-1's if applicable
For social security income, provide a copy of your award letter, or, a copy of the SSA-1099, or, copies of signed and filed federal tax returns
For retirement income, pension, or annuity, provide a copy of a letter/statement from the organization providing the income, or, IRS W-2 or 1099 forms, or two month's bank statements reflecting the automatic payment identifying the source of income, or signed federal tax returns. If the income is from an IRA, 401 (k), or Keough Account, they have to determine that the income will continue for at least 3 more years.
You will also need to provide:
A copy of driver's license or passport to confirm ID
Permanent Resident Alien Card
If a Veteran, a copy of your DD-214 form or Certificate of Eligibility
Copies of school transcripts or diploma if in the last 2 years
A Copy of most recent account statement(s) for Checking/Savings accounts.
Important: You will need to provide ALL pages of the statements
The statement must have your name, address, the institution name, and it must cover 30 days of account activity. It cannot be just an account balance.
You will be asked to document and explain large deposits that are not payroll deposits into the account. If there are transfers from another account, you will need the statement from that account as well (even if you are not using the funds)
Copy of mutual fund/brokerage account statements. (Same requirements as checking/savings accounts above)
Copy of retirement fund account statements if you are using these funds for settlement. You will need to provide documentation that you are permitted to access the retirement funds, and the terms in which you may draw or borrow against those funds if you intend to do so.
Copy of the HUD-1 Settlement statement from the sale of your home. this is the document you received at settlement with all of the closing figures listed on there. If you are closing the same day, the title company will need to provide it before you close on the new home.
In the event of gift funds, you'll need to provide the amount of gift, name, relationship, address and phone number of the donor. A gift letter is provided for you and the donor to sign
Copy of your complete divorce decree and/or separation agreement
Copy of the declarations page(s) of your current homeowner's insurance policy
Copy of your most recent mortgage statement
Purchase: if keeping current home or investment property: provide a copy of your mortgage payment statement on your current home to document that taxes and insurance are included in the payment. If they're not included, you'll need to document the cost for taxes and insurance.
Copy of your home equity statement or copy of that note agreement to document the terms of repayment
Cop of the condominium association payment statement for your condominium
Condo management contact information. They will need to provide information to the lender for teh condo association and building. Many of the management companies charge a fee for this service which was included in the closing cost estimate, but the fee varies depending on the company/building.
VA Refinance: provide a copy of your current note (it will be in the settlement papers from when you bought your home, or your last refinance)
Copy of lease agreement on rental properties
Name and number of your landlord
Prior to Closing:
When your deposit check provided with the purchase contract clears your account, update the account activity to verify it. IMPORTANT: When you updated your account to show that the deposit check has cleared you will have to document deposits that are not payroll checks. PLEASE DO NOT ADD DEPOSITS TO THE ACCOUNT UNLESS YOU CAN DOCUMENT THE SOURCE
If you are liquidating stock, mutual funds, or a brokerage account, your lender will need to see documentation that you have withdrawn funds from the account and that you have transferred the funds into a liquid account.
If you are selling a home prior to closing, please provide a copy of the HUD-1 settlement statement (if it is the same day, the settlement company will provide)
If you are using retirement funds-document the receipt and deposit of the funds into a liquid account
Gift funds, after you have received the funds, please document that you have deposited the money into your account. The donor of the money to you will also need to provide a copy of their account statement to verify the gift came from them.
Obtain homeowner's /hazard insurance coverage for the property you are buying. The lender will need to receive documentation from your insurance agent at least 7 days prior to closing that you have coverage and is paid for one year (or they can collect at closing). The policy should cover the replacement cost of the property equal to the insurer's or appraiser's cost to rebuild in the event of total loss.
If you getting a VA, FHA or VHDA loan the clause is different and the processor will inform you of your insurer.
If you are buying a condo, it is very likely that additional condo insurance may be needed for your unit. This is required if the master insurance policy in the building does not provide interior coverage for your unit. The insurance industry calls it a HO6 plicy and your lender will need to receive documentation from your insurance agent prior to closing that you have this coverage. The amount of the insurance should equal 20% of the property's appraised value.