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 APPLICATION INFORMATION
WHAT'S NEEDED AND HOW IT'S KEPT PRIVATE
In days past, there was a wide variety of loan options, including the infamous "Pick-a-Pay" loans (where the borrower chose their payment amount - not always a good thing) and "Liar Loans", where all that was needed was a pulse and pen.
Today, those loans are gone. Lenders are much more serious about managing their risk and a large part of managing that risk is gathering and verifying information about every borrower.
Even "reduced doc" programs, where someone with substantial positive compensating factors (like a great credit score, little debt and lots of assets) are disappearing. There are the FHA "streamline" refinances or the VA "IRRRL" (Interest Rate Reduction) programs, where a well-documented borrower can refinance into a lower rate with a solid payment history and a little paperwork. But, for the rest of us, it's time to show our hand.
Lenders focus on information in five specific areas - your identity, employment, income, assets and credit. These components make up the credit (or borrower) portion of a loan application package.
Once you choose a specific loan program and have completed the initial loan application, we'll submit your loan to an Automated Underwriting System (AUS). With the AUS approval, you'll know exactly what documents is needed to completed a loan application package.
Below you'll find a description of the information and documents most borrowers need to complete their loan application package. Not everyone will need to provide every document listed and some will need to provide documents not shown here to document their unique circumstances.
Having this list upfront gives you the flexibility to gather information at your own pace, rather than when the pressure is on and the purchase offer (or refinance) is on the line.
So, what do you need?
As you gather your info and docs, bear in mind, first and foremost:
We do NOT want original documents.
We cannot guarantee their return and don't want the responsibility associated with hard-to-replace important originals, like W-2s or divorce papers.
Social Security Number(s)
INFO PURPOSE: To verify the identity of all borrowers
DOCS: The credit report provides third party verification for this info. If a fraud alert is triggered on the report, proof of SSN from you may be required.
USA Patriot Act
INFO PURPOSE: To verifying a borrower's eligibility to borrow money in the United States as well as assist the Federal government in fighting fraud and identify theft.
DOCS: A copy of an enlarged current, government-issued photo ID.
Specific, Personal Information
INFO PURPOSE: To further identify specific borrower information.
DOCS: No docs needed upfront, just information on page 1 of the application. Examples of the information needed include a borrower's level of education, number of dependents and a two-year residence history.
EMPLOYER INFORMATION
INFO: Employment info or the last two years, to include employers, employment dates, addresses, phone numbers as well as your job title(s) and salary.
DOCS:
- W-2's for the last two calendar years.
ADDITIONAL DOCS: A written Verification of Employment (VOE) from your employer. Some employers use a third party service (EG: The Work Number, www.theworknumber.com) to provide VOEs and may charge borrowers a fee for the service.
IF YOU ARE SELF-EMPLOYED -
INFO: Proof of Self-Employment, Contact info for your CPA.
DOCS: Business licenses for current fiscal year and last two fiscal years.
ADDITIONAL DOCS: Business tax returns or IRS Form K-1 may be needed. In some cases, a letter from your tax preparer (EG: a CPA) verifying your self-employment may be needed.
SALARY OR OTHER INCOME DOCUMENTED with A W-2
INFO: Employer's name, address and phone along with an HR contact. Your start date and current duty title.
DOCS:
- Current pay stubs for the last full month, to include Year-to-Date (YTD) income.
ADDITIONAL DOCS: Like verifying employment, a written Verification of Employment (VOE) may be needed.
IF YOU ARE SELF-EMPLOYED -
INFO: Proof of Self-Employment (S/E) Income
DOCS: Two years' personal Federal tax returns. Info from the business (EG: IRS Form K-1) may also be required, depending upon how the business is structured.
NOTE: Mortgage guidelines consider a person to be self-employed whenever they own 25% or more of a business, regardless of how the business is structured (EG: LLC, S-Corp, C-Corp or Partnership). The business' tax info (EG: IRS Form K-1) may be needed even if you earned W-2 income.
IF YOU EARN INCOME FROM: Commissions, Overtime, Bonuses, Partnerships, Rental Properties, Trusts, Notes Receivable and/or Interest and Dividends.
INFO: Confirmation the income has been earned at least two calendar years and that the income is likely to continue in the future.
DOCS: A VOE for employed borrowers, tax returns for income earned through partnerships or non-employment income.
IF YOU ARE EMPLOYED IN A FAMILY BUSINESS -
INFO: Verification of consistent, documented income (EG: income paid on a W-2 or K-1).
DOCS: Personal Federal income tax returns, W-2s or 1099s and all schedules for the past two years.
LIQUID or SEMI-LIQUID ASSETS:
INFO: Documenting current asset information for asset accounts to include account types, numbers and balances as well as financial institution info - name, address, phone number.
DOCS:
Current Asset Statements for the most recent two months,
--- including Checking, Savings, Money MKT accounts or CDs, etc..
--- including stocks, bonds, investment and retirement accounts
NOTE: Web-based printouts are OK if they include the account holder's name (yours), the institution name and a full account number. If not, we'll need hard copies to support the information.
ADDITIONAL SUPPORTING DOCS: A Verification of Deposit (VOD) or Verification of Asset (VOA) may be requested from the financial institution. Some institutions charge the account holder a fee to provide VODs/VOEs. Turn-times can run several days, potentially delaying underwriting.
NON-MORTGAGE DEBT:
INFO: Liability info to include creditor name(s), account number(s), balances and monthly payments.
DOCS: This info is pulled from the credit report. If there is an account that doesn't appear on the credit report, we'll need the most recent account statement showing the info needed.
ALT DOCS: With your written permission, we can request a Verification of Liability (VOL) from the creditor. Once received, the VOL will be provided to the credit reporting agency so they may add the account to your credit report.
MORTGAGE DEBT:
INFO: Liability info to include mortgagee name(s), account number(s), balances and monthly payments.
DOCS: This info is normally pulled from the credit report. If there is an account that doesn't appear on the credit report, we'll need the most recent account statement showing the info needed.
ALT DOCS: With your written permission, we can request a Verification of Mortgage (VOM) from the creditor. Once received, the VOM will be provided to the credit reporting agency so the mortgage info may add the account to your credit report.
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IF YOU ARE DIVORCED OR SEPARATED |
INFO: Verification of any obligation to pay alimony, child support or separate maintenance or receipt of such income, if it is to be included as part of your income used for loan approval.
DOCS: Complete executed divorce decree and settlement agreement.
NOTE: If you're paying alimony, child support or separate maintenance, provide proof of twelve months' payment. If you're receiving one of these and choose to have the money be considered part of your income (it's a choice, you don't have to), provide proof of receipt for twelve months (cancelled checks, bank statements reflecting deposits, etc..).
REAL ESTATE
INFO: The status of real estate holdings and the costs associated with each holding.
DOCS: Name and address of all mortgage lenders for the past 24 months, account numbers, monthly payments and balances.
IF YOU'VE SOLD YOUR HOME, BUT NOT YET CLOSED:
DOCS: A copy of the ratified sales contract
IF YOU'VE SOLD A PROPERTY, CLOSED AND WILL USE THE PROCEEDS FOR THE
DOWN PAYMENT ON YOUR NEW PURCHASE:
DOCS: A copy of the signed HUD-1 Uniform Settlement Statement from the closing.
RENTAL
INFO: Name, address and phone number of landlords for the past 24 months
DOCS: Proof of satisfactory rental payment history for the last 12 months.
ALT DOCS: If you're rented through a property manager, we can, with your written permission, request a Verification of Rent (VOR). Some property managers will charge the renter a fee for providing this information and some take several days to return the completed VOR.
DOCS:
- Ratified Purchase Offer and all addenda, each with signatures of all buyers and sellers.
- A copy of the MRIS printout (long version)
IF YOU'RE RECEIVING A FAMILY GIFT FOR THE DOWN PAYMENT
INFO: Name, address and relationship to donor.
DOCS: Verification of gift funds in both the donor's and recepeint's accounts. Gift Funds letter from the donor (we provide that).
NOTE: Not all loan programs allow gifts for a down payment.
and USING FHA FINANCING
- Evidence of Social Security Number and a copy of a current, government-issued photo ID
and USING VA FINANCING
- DD Form 214 and Certificate of Eligibility.
NOTE: If you're obtaining a Construction loan, construction documentation is also required.
INFO: Verification of current liens secured by the subject, along with legal info for same.
DOCS:
- Copies of the last HUD-1 and survey or plat on the subject property.
- Copy of the original title insurance binder
- Copies of the most recent month's statements for all mortgages on the subject property.
NOTE: Additional documents may be needed in certain circumstances.
So, what do you do?
Your website file is a great place to start.
Anything you submit over our website is 100 percent, fully secure. And we never, ever share it with anyone - except by permission, that is. Your info is only shared with those people whose input is needed to obtain your loan - the underwriter, the appraiser, possible a mortgage insurance company, if needed.
Whether you upload the docs directly into your file or use the website's DirectFax, your information is safe and secure.
What's needed?
Here is a list of the information mortgage lenders will use to consider your loan application.
This list is meant to be all-inclusive. You may not need to provide all this information, especially if you go with a "Reduced Doc" loan like stated income or a streamline refi.
We'll be able to provide a tailored Document Checklist once I've run your file through Automated Underwriting (AUS) and learned exactly what the AUS requires.
Bear in mind also that we'll always attempt to be thorough (without being too Type "A") so more info isn't required down the line. Even so, the underwriter always reserves the right to ask for additional information, whether it's due to current docs aging and expiring or a red flag needing more supporting evidence.
Feel free to touch bases if you feel there is something relevant that isn't mentioned here. It's better to verify than to find out later a piece of info was needed and missed. And, as always, feel free to touch bases whenever we might clarify any part of the info provided or provide any additional info.
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