Mortgage loan documentation needed…
Documentation needed may vary when the Lender uses the Agency “automated underwriting system”, which Mortgage Lenders, who submit loans to FNMA (Fannie Mae) or FHLMC (Freddie Mac) are required to use. The mortgage loan documentation needed, sometimes depends upon how good your credit scores are.
If your loan has issues or concerns, such as insufficient credit, employment history or funds issues, (to name a few); it cannot be evaluated with Desk Top Underwriter *FNMA or Loan Prospector *FHLMC, then your loan will require a “Manuel Underwrite” and then your documentation will be considered “full doc”.
This is also true for FHA/VA loans. If you take all of this information upfront; the Lender will have it on file and will not have to come back to you for additional information should they need it.
This is a list of what loan documentation you need to take to the Lender of your choice:
- Paystubs – most recent (2) if paid bi-weekly or bi-monthly (4) if paid weekly (1)
- W-2 for (2) years – most recent (2)
- 2 months bank statements (all pages) (3)
- Most recent retirement statement
- Most recent investment account statements (mutual funds, annuities, stock)
- 2 years of 1040s (if self-employed) most recent years (4)
- Know your employer’s address, phone number of human resources
- Know your banking institutions, address, phone number
About the above:
- Paystubs: your paystub is reviewed for the year to date earnings, hourly rate, bi-weekly rate or bi-monthly rate, or sometimes your annual salary (if stated), your deductions, and (yes) if you have a child support deduction or garnishments ( the latter is viewed as negative and *explanations warranted).
- The employer name and your name must be on the paystub and it must be computer-generated. If it is not, then the Lender will have to get a Verification of Employment (VOE) directly from the Human Resources department. If your paystub is inconsistent with verbal information; earnings, what your position is, or how many hours you work, to mention a few, this must be verified.
- W-2: must be consistent with verbal information and if necessary verified information from Verification of Employment.
- Bank statements: Your name must be on the bank statements. If any large deposits exist, you must explain and if you have recently made a new loan, this must be disclosed with the terms of the loan. (if recently and not on the credit report). If your parents have given you a gift, then you must have a gift letter, (these should be obtained at the Lender’s office which will list all of the pertinent information needed), and actually, if you are getting a gift, you must give a paper trail of the funds. The donor must be a relative and you must be able to document the transfer of the funds from the donor to you. It cannot be a loan that must be repaid. *this can get quite sticky sometimes if the funds have already been transferred. The Lender must make sure that you have not made yet another loan you will have to pay back. ANY loan you have made must be secure with a marketable asset if it is to be used as a closing cost.
- 1040’s for self-employment. If you are self-employed you may need more than just (2) years of tax returns. You may need a year-to-date P & L Statement (profit and loss) income statement to include a balance sheet. Normally it does not have to be audited, but there are occasions when it does. Sometimes, if you are not “schedule C”, you may have to provide Business Tax Returns for the (2) most recent years.
Getting the right documentation together is essential for a safe, fast, income analysis.
Mortgage Lending is detailed. The above short list could get longer if you have different criteria which may need to be verified. If you, for instance, will be getting a gift of equity, certain guidelines and loan documentation are required. We shall have more information about the mortgage loan facts you need as we progress.
