Will your loan close on time or will you have to ask for an extension of time to close? Whether or not the loan closes on time can be affected by any of the parties involved not getting correct documentation in a timely manner. Buyers, sellers, agents and loan officers alike will have a much smoother and satisfactory transaction if all documents required by the underwriter are requested and returned to your loan officer a soon as possible and best case scenario would be to have all your documentation viewed by an underwriter and have full loan approval before you even make an offer a house!
Typical documents that an underwriter will want to see in order to give you a loan commitment and final approval are:
Last two years W2's
Last three months bank statements ( you many have to update these prior to loan closing)
Last two months paycheck stubs (again, you may be asked to update these prior to closing)
Request for income tax returns IRS form 4506t
Self Employed Borrowers: Must provide last two years tax returns including all Schedule C worksheets
Student Loan information or letter of deferment and date of when loan payments will start
Divorce Decree (They need to know if you pay or receive alimony or child support?)
Permission to pull Credit Report
Letters of explanation for any derogatory statements on your credit report
Letters from any family member giving you gift money for your down-payment
After you have an accepted contract:
Make sure your Realtor sends a copy of the contract to your lender and title company.
Sign and return all lender truth in lending disclosures as soon as you receive them.
FHA Borrowers: Must perform a termite inspection or have proof of recent treatment from seller.
FHA Borrowers must sign an FHA Amendatory Clause prior to the file being sent to final underwriting. The seller must also sign this document.
Appraisal: Ordered on your behalf by your lender. If the home was a rehabbed house, there may be two appraisals ordered. FHA borrowers can only pay for one appraiser by law, so make sure your rehabber seller understands they may have to pay for the second appraisal if they accept your offer.
There may be more documentation required depending on the lending company you are working with. Let your loan officer know that you would like to have a list of everything they will need from you in advance, schedule a time to meet with them at the office and be sure what you brought is correct. Have a follow up meeting to bring in correct documents if needed. If you don't get everything to them in a timely manner, it will cause delays for your file and you may not close on time. This could be a very stressful situation if you have planned out movers, utility and insurance transfers, days off work or have a deadline to be out of a rental property or your current home. You could even lose the house of your dreams if a government or bank is the current owner of the home. They could cancel the contract if you can't meet the time frames set in the contract.
Working all the details out in the beginning will make for a smoother transaction and happier home buying experience.
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