Guidelines have changed and everything.. I mean everything has tightened up. Talk about one extreme to the other! Just a few years ago, most banks didn't even require the buyer to have a pulse (and some actually didn't!!). Nowadays, full doc loans are about the only way to obtain financing for purchases
But the reality is that not a whole lot has actually changed with respect to the documentation required by lenders on full docs loans, considering how much has changed during and after the mortgage meltdown. The biggest change is the simple fact that docs are required at all!
Standard requirements for a 'simple' borrower are:
- Pay stubs for most recent 30 days
- 1 -2 months of most recent bank statements
- W-2's for last 2 years
That's it! Bring me a buyer who is salaried or hourly, doesn't rely on commission, bonus or OT, has all the money they need in their bank account, doesn't claim unreimbursed expenses on their returns, has sufficient credit and I will only need the above 3 items. (That's not far-fetched, is it??)
Now, let's say the buyer is self employed, divorced and pays or receives support, relies on other income, owns properties, or has one of a miriad of other situations going on... Let's see what else might be required
- Tax returns for 1-3 years
- Divorce decree or separation agreement
- Other income docs like SS Benefits, pension, annuities, interest/dividend income, etc..
- Letters from doctor to evidence disability
- Additional bank statements to evidence support payments received
- Mortgage statements on currently owned homes
- HOA, insurance, tax statements for currently owned homes
- Letters from CPA if down payment money comes from business accounts
- Letters of intent or explanation from borrowers for inquiries, occupancy intentions, credit derogitories
- Filed Bankruptcy docs
- Alternative credit accounts like utilities, insurance, cell phone, child care, etc..
- Evidence of where large bank deposits came from
- Evidence of retirement account disbursement
- Evidence of student loan payments when not showing on credit report (common)
I'm sure I could think of twenty more things if I took the time, but I think you get the idea!
Visit www.brianwesthomeloans.com for answers to commonly asked questions about rates and loan programs
*reposted for public view
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