Why won't the lender just give me a list of what documents they want?

Everyone hates going through the mortgage lending process.  It is frustrating, it takes time and effort and it feels like your lender has to know what you ate for lunch and what you paid for it. 

One of the biggest complaints I hear from people about their lenders is that they are constantly asking for a new document.  "Why don't they just give me a list of what they want"  Well I can't really answer this one because I am not a lender.  I can however let you know how to relieve the  frustration and be prepared for anything they ask for.  

 

Here is a list of the basics that lenders usually do want to see before they can complete a loan.

 

Verification of income (If you made money be able to show where it came from)

• Earnings statements: W-2 forms, recent pay stubs
• Tax returns for the past two years;
• If you are self-employed: profit and loss statements and tax returns for current year and previous two years;
• Additional income: social security, overtime bonus, child support, rental payments to you, alimony, commission, interest income, social security, retirement funds, veteran's benefits etc. 

 

Verification of your assets

• List of bank account numbers, the address of your bank branch, checking and savings account statements for the previous 2-3 months;
• List of savings bonds, investments, stocks, 401k accounts etc and the current market values;
• Copies of titles to any motor vehicles, boats, homes, property or other large value items  that are paid in full.
• Copies of Trust papers if you have a trust. Proof of inherited items.
• You will need to prove where you are getting the down payment for your new property. If a relative is gifting you the money you will need to show proof.  To take this once step further often the lender will not only ask for a letter documenting the gift with a statement from the person gifting that money showing they had the ability to do so.   I have seen them require bank statements proving that the person got the money, had it in their account and gifted it to you.

 

Information about the purchase  (Your agent can provide this to the lender but you should have a copy as well)

• Copy of the ratified purchase contract;
• If you made an earnest money deposit to the seller, bring a copy of the receipt of check.

Your debts

• Credit card bills for the past three billing periods;
• Copies of statements for other debt such as car loans, student loans, furniture loans, personal and cosigned installment loans.  Make sure you have all the pages of these statements even it the last page is basically blank.  These should have the creditor addresses, account numbers and phone numbers;
• Evidence of mortgage and/or rental payments;
• Copies of alimony or child support.
• Divorce papers:  It is often hard to seperate debts of an ex spouse so come prepared.

Overcoming obstacles

• Have you had a foreclosure or short sale?  Bring all the paperwork from the hardship to the resolution.
• If you are going for a VA loan you will need your Certificate of Eligibility.  (And the name on the purchase contract needs to be exactly the same as the certificate)
•  Do you have a lien or judgment that should be off your record?  Bring the release with you just in case it hasn’t been properly removed.
• Quite often past due bills have to be paid off to get the loan.
• In Idaho Title and escrow will search for State liens against the buyers.  Even if you are paying cash, you will need to pay off a state tax lien before buying a new property.
• If you are moving to a new area and will have a job in the new area you may need to show proof or even be on the job for a certain number of days before the lender will fund the purchase.

 

ANYTHING GOES

• I have seen some very strange lender documentation requests over the years.  Expect the un expected.  I personally had a lender ask me on a refi for a copy of  the back of the cashed earnest money check from 10 years earlier when I bought the land.  Not even the bank had this after two years.  I got luck in that the real estate agent I used did have a copy of it in her files.
• I have seen lenders ask for birth certificates of children even though they were adults and not living in the house.
• On a second home purchase a lender asked for proof of life insurance dedicated to pay off their main home and a statement from named executor that funds would be used that way.

 

Gathering up every piece of documentation before talking to the lender will save you from the panic attacks, closings being held up and general frustration.  Best of luck in your new real estate purchase.

For those of you in the mortgage field, if you have a good list of what things you need from clients, please feel free to share it with us.

 

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http://www.lakeandhomes.com Rain Silverhawk

rain@lakeandhomes.com
Rain Silverhawk Realtor
Keller Williams  Realty
120 S. Second Ave. |  Sandpoint, ID. 83864
Phone (208)  610-0011  FAX 800-760-1936