So you have decided to buy a piece of residential real estate and you are going to us a loan to buy it. Solid preparation here at the pre-interview stage is going to determine how your loan will flow after you submit your application. Most lenders will require similar documentation as the low doc / no doc loans of the past are no more. The first thing I like to do with my clients is to provide a list of required items that they will need to gather in advance of the application. Below is the list I provide my clients prior to the loan application in our Paso Robles California direct lending center.
For loans to buy a new home
ALL BORROWERS
1. Copies of W-2’s/ Federal Tax Returns for the last two years;
2. Copies of paycheck stubs for the last 30 days (most current);
3. Copies of checking and saving account statements for last three months (all pages);
4. Copies of quarterly or semi-annual statements for checking, savings, IRA’s, CD’s, money market fund, stock, 401k, etc.;
5. Copy of sales contract when fully executed;
6. Employment history for the last two years (address any gaps of employment);
7. Residency history over the last two years, with name, phone number, address and account number of Land or Mortgage Company. Rental property copies of leases plus mortgage information.
8. Canceled earnest money check when it clears or corresponding bank statement, if applicable;
9. Commissioned or bonus income -- if 25% or more of base, must have tax returns;
10. Refinance Copy of Note, Deed of Trust, Settlement Statement, Survey, and Insurance information;
11. Any assets used for down payment, closing cost, and cash reserves must be documented by a paper trail;
12. If paid off mortgage in the last 2 years, need copies of HUD1;
13. Copy of drivers license for applicant and co-applicant.
14. Copies of your most recent 2 years Federal tax returns, with signature;
15. Copy of social security card for each applicant and co-applicant;
SELF-EMPLOYED BORROWERS:
1. Copies of most recent 2 years tax returns (with all schedules including k-I's if applicable);
2. Copy of current profit & loss statement and balance sheet;
3. Copy of corporate/partnership tax returns for most recent 2 year period if owning 25% or more of company -- copies of W-2’s and/or 1099 forms.
DOCUMENTS WHICH MAY BE REQUIRED:
- Relocation Agreement if move is financed by employer, i.e. buyout agreement plus documentation outlining company paid closing costs benefits;
- Previous bankruptcy, need copies of petition for bankruptcy and discharge, including supporting schedules;
- Divorce Decree if applicable;
- Documentation supporting moneys received from social security/retirement trust income, i.e. copies of direct deposit bank statements, awards letter, evidence income will continue.
For Refinance loan please see this list.
ALL BORROWERS
1. Copies of W-2’s for the last two years; 2010/2011
2. Copies of signed Federal Tax Returns; 2010/2011
3. Copies of paycheck stubs for the last 30 days (most current)
4. Copies of checking and saving account statements for last two months (all pages) that are associated with the transaction
5. Copies of quarterly or semi-annual statements for checking, savings, IRA’s, CD’s, money market fund, stock, 401k, etc.
6. Employment history for the last two years (address any gaps of employment)- Online application portal can be used
7. Copy recent mortgage coupon, tax bill and home owners insurance declaration page
8. Copy of driver license for applicant and co-applicant.
9. Copy of social security card for each applicant and co-applicant
SELF-EMPLOYED BORROWERS: If Applicable
1. Copies of most recent 2 years tax returns (with all schedules including k-I's if applicable);
2. Copy of current profit & loss statement and balance sheet;
3. Copy of corporate/partnership tax returns for most recent 2 year period if owning 25% or more of company -- copies of W-2’s and/or 1099 forms.
DOCUMENTS WHICH MAY BE REQUIRED: If Applicable
- Relocation Agreement if move is financed by employer, i.e. buyout agreement plus documentation outlining company paid closing costs benefits;
- Previous bankruptcy, need copies of petition for bankruptcy and discharge, including supporting schedules;
- Divorce Decree if applicable;
- Documentation supporting moneys received from social security/retirement trust income, i.e. copies of direct deposit bank statements, awards letter, evidence income will continue.
In this day and age of technological advances I would suggest that if you can you take your documents and have them scanned in for you and put on a flash drive with a password for security. If you have a scanner at home this is very simple to do, if not you can go to the UPS store or a FEDEX store and it and be done quickly and easily. It is best for the items to be scanned one document type at a time. Example, all of 1 year of taxes in one scan and the next year in a separate scan PDF file. This will enable the fastest processing of your documents and loan application. If you scan all at one time to huge PDF file then the loan processor will have to deconstruct your file to separate it all out and that can take from 1 hr to several hours to deconstruct your documents, thus putting your file in the slow lane. If you can provide your documents digitally, in PDF and separated by type to your Loan Officer you will be able to be 2 steps ahead of all other applications taken that day who did not prepare in this diligent format.
By having all your documents in order will save you delays in the processing, underwriting and closing your loan. Most importantly you will stand out as an organized and prepared borrower who the bank SHOULD loan to.
With my work on the beautiful Central Coast I have learned that being prepared is like paradise. Living in Paso Robles and working in the surrounding communities of Arroyo Grande, San Luis Obispo and the north coast of Los Osos, Morro Bay, Cayoucs and Cambria.
If you are in need of any advice on how to best prepare your documents for a loan application please contact us directly.
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