Get Your Documents Organized And Ready Before Applying For A Mortgage. As we begin to move from a Buyers Market to a Sellers Market, dates for Mortgage Commitment and Closing will be playing a bigger roll in offers submitted on properties. If two offers on a property are similar, the one with the least time to obtain Mortgage Commitment, and quickest Closing Date, will most like be considered the stronger offer. This means that Borrowers need to have the documents needed to obtain a Mortgage organized and ready. By having the Mortgage documents organized and ready, Borrowers will be able to meet with their Loan Originator sooner, and have their loan submitted into processing much quicker. Also the more complete Mortgage file is the quicker it can be put into process, and the quicker the Borrower will receive Mortgage Commitment.
You would think that putting the documents together that I have listed below would be a simple task, but this apparent simple task many times presents delays and problems. That is why when I Pre-Approve a Borrower for a loan, I tell them that they need to start organizing the documents that they will need right away, especially if they plan on purchasing soon. I then go over the list of documents that they will need for the type of loan that they will most likely will be applying for. Some documents may differ based on the Loan Program, but there are some documents that are needed regardless of the Loan Program, such as:
- One month of paystubs
- W2’s for the past two years
- Bank statements, 1 month for conventional loans, and 2 months for FHA
As I stated before, even though these documents seem simple to gather and have ready, many times Borrowers have a problem locating them, which end up creating delays and issue in approving the Mortgage.
I can sort of understand why a Borrower may not have kept paper copies of their paystubs, or even keep paper copies of bank statements. If a Borrower does not have bank statements we can get around it by just having the Borrower go to their bank and getting a bank printout of their account, but paystubs are a different matter. If they do not keep their paystubs, and cannot get duplicate ones from work, then we may end up having to wait a full 30 days for them to acquire them. That may not be a major issue for someone who has plenty of time to Close, but for someone who has to Close quickly, that could be a big problem. The documents that I am always amazed the most at, that a Borrower does not have are W2’s and Tax Returns. I could not even imagine not holding on to mine for a minimum of 5 years in case of an audit. If a Borrower does not have W2's or Tax Returns they can get a copy directly from their local IRS Office, but it still creates a needless delay.
Other documents that are commonly needed with some loan programs that Borrowers don’t always have handy, and could slow down the loan approval process are:
- 2-3 years Tax Returns needed for:
- Self-Employed Borrowers
- CHFA Loans
- Gift Money Documentation:
- Copy of Gift Check
- Proof of withdrawal
- Proof of deposit
- Divorce Decree:
- Proof of receipt of Alimony/Child Support Payments
- Bankruptcy documentation
- Certificate of Eligibility (VA Loans)
There are other documents that are sometimes needed, but these are the most common.
Buying a house can be a very stressful process, but much of the stress can be eliminated if the Borrower follows the advice of the Loan Originator that they are working with early in the process. A little time spent on Getting Your Documents Organized And Ready Before Applying For A Mortgage, can save many hours of delays and stress during the Home Purchasing Process, and might even be the difference of having an offer accepted or not.
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Info about the author:
George Souto is a Loan Officer who can assist you with all your FHA, CHFA, and Conventional mortgage needs in Connecticut. George resides in Middlesex County which includes Middletown, Middlefield, Durham, Cromwell, Portland, Higganum, Haddam, East Haddam, Chester, Deep River, and Essex. George can be contacted at (860) 573-1308 or gsouto@mccuemortgage.com
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