Happy Paper Trails to You

Happy Paper Trails to You

 

If you want to realize, first hand, just how far the mortgage lending industry has gotten away from the days of the "Wild West," there is no single better way to do it than to hath the fury of an underwriter's scorn of your assets --- you know, the very bank statements, down payment funds, deposits and gift money that are integral to your home loan application.  There's a new sheriff in town, pardner, and if you don't want to get hung at high noon when you go to get a conventional, jumbo or FHA loan, here's what you ought to know:

 

What's a Fortnight?

It's 14 days.  And we're going to ask for statements to cover four of 'em when it comes to ANY accounts you'll use for your transaction.  That's right --- TWO MONTHS of bank statements for all funds that comprise the down payment, the closing costs, and the asset reserves, if required.  While you're at it, make sure to provide all pages of the statements, even if blank, because we will ask.  Online printouts are generally not acceptable and the excuse that you don't get statements is getting a little long in the tooth.  Trust us that every account holder can get a statement somehow, some way.  If you're serious about getting pre-approved, find out the most effective way to produce your statements.

 

You and the Horse You Rode in On

So you've ponied up two months of statements.  Are you ready to hitch up to the saloon?  Hardly.  We will peruse those statements line by line and if we see transfers or deposits (not of payroll origin) into  the account, and they are considered to be "large" in nature, usually defined as greater than 50% of your gross monthly income, we will want a "paper trail" to the source.  That could lead us down any rat hole, as you might suspect.  Next of kin slipped you $5000?  Now we'll need to know how and why and confirm they don't expect to be repaid.  Here is where cash is not king and any funds that don't fit guidelines will be brought into the harsh light of day.  It's essential that you discuss with your loan officer, as early as possible, how you plan to make your down payment and closing costs....'cause once we get on the scent you will be sorry you did not.

 

Eureka!

Here's what I've found to be the best way to assure a smooth approval when it comes to asset documentation.  I realize it's not always possible --- sometimes the timing is just not in your hands and/or you have to liquidate stocks and move money for any number of reasons.  But like with qualifying your income, and assuming you do have control, here's a chuck wagon recipe for success:

• Ask you loan officer, as far in advance as you can, what will be the requirements for your specific mortgage program or investor.
• If possible, move all of these funds into an account that has little activity (no frequent large withdrawals or deposits) and "season" it there for two months.
• When completing your loan application and process, include just those accounts and statements.
• Make sure that your wire or certified check into escrow comes only from the documented accounts.

Documenting the asset portion of your loan approval is one of the tougher things the modern loan process will throw at you.  Understand and master it and you'll happily ride off into the sunset.  Call me today if I can help.

 

Happy Trails,

 

 

Rob Spinosa
Mortgage Loan Originator
NMLS: 22343 CalBRE: 01297944
Cell: 415-367-5959 Fax: 415-366-1590
rspinosa@rpm-mtg.com www.rpm-mtg.com/rspinosa 
1058 Redwood Highway, Frontage Road, Mill Valley, CA 94941

 

 

 

RPM Mortgage, Inc. – NMLS#9472 – Licensed by the Department of Business Oversight under the Residential Mortgage Lending Act. Equal Housing Opportunity.