I recently received an article on the importance of having all of your documentation ready for a home loan, and I felt it needed passing on. We would all hate to see our clients, in this tough mortgage state, to not get their loan due to missing documentation. I think that this would be helpful to pass on to clients, so that they can have it ready from the very beginning.
1. All W-2 forms for each person who will be a co-borrower on the loan. You'll also want to provide the contact information for the human resources manager or your direct bosses, so the mortgage lender can verify your income.
2. Copies of completed federal tax forms for the last two or three years, including any schedules or attachments. These will be required primarily of self-employed individuals or those who are claiming a history of rental income. Either way, you won't need your state returns.
3. Copies of one month's worth of pay stubs.
4. Copies of the last two or three bank statements for every bank account, IRA, 401(k), Keogh, other retirement account or brokerage account the co-borrowers own. Bring a copy of your most recent statement for any other assets you have.
5. A copy of the back and front of your canceled earnest money check plus the escrow deposit receipt. If you don't get your canceled checks back, then access the electronic version on your account and print it our.
6.. A copy of the fully executed sales contract and all riders. You'll need both broker's names, addresses and phone numbers.
7. If you're selling a residence at the same time you're buying it, you'll need a copy of the listing agreement and, if the home is under contract, a copy of the fully executed sales contract. When the property closes, you may be asked to provide a copy of the actual disposition of funds from the escrow agent.
8. If gift or grant funds are involved, the giver (or grantor) must provide proof that he or she had that money to give, such as a copy of th giver's recent bank statement. If you're receiving a grant, the grantor should provide you with a letter outlining the grant and stating that the funds do not need to be repaid. Be prepared to show the paper trail for the money, including a deposit slip. The giver will have to fill out a gift letter affidavit, available from the loan officer, indicating that the funds were a gift and the gifter does not expect repayment. In short, you'll need a copy of the check, deposit receipt and a bank statement verifying the deposit.
9. Copies of all divorce decrees and property settlement agreements.
10. A list of your addresses in the last two years.
11. If you've made any large deposits ("large" means anything larger than your monthly salary) into your bank accounts in the last three months, be prepared to provide an explanation with proof as to where the funds came from.
12. If you've opened a new bank account in the last six months, write a letter explaining where the money came from to open this new account.
13. Documentation to verify additional information, such as Social Security, child support and alimony.
14. If you have had a previous bankruptcy or foreclosure, make sure you have a complete copy of the proceedings, including all schedules, and a letter explaining the circumstances for the bankruptcy or foreclosure and the discharge certificate.
15. For most loans these days you will need a photocopy of a picture ID (usually a driver's license or U.S. passport) and in some cases a copy of your Social Security card. Also, for VA loans you will need to bring proof on enlistment (your DD214) and Certificate of Eligibility for a VA loan.
16. If you have judgements against you that have been paid in full, bring a copy of the recorded satisfaction of judgement. But if you have a judgment against you or are involved in lititgation, you will need copies of documents describing any lawsuits and may expect to have to settle and pay off any judgments prior to closing on the loan.
This is not an all inclusive list, and there may be less documentation, or more needed. It would just be in your clients best interest to have all of their documents in order, so that they do not run in to a problem later.