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 APPLICATION INFORMATION
WHAT'S NEEDED AND HOW IT'S KEPT PRIVATE
In days past, there were a variety of loan options, including the infamous "Liar Loans" and "Pick-a-Pay" loans. Even No-Doc loans, where all that was needed was a pulse and pen, are gone. Today's 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.
There are still a few "reduced doc" programs, where someone with substantial compensating factors (like a great credit score, little debt and lots of assets) can go with a "Stated Income" loan and there are the "streamline" refinances, 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 cards.
Lenders focus on information in five specific areas - your identity, employment, income, assets and credit. Below you'll find a breakdown of the information and documents most borrowers will need to complete their loan application package. Not everyone will need to provide every document and you'll receive a checklist tailored to your specific situation once your file has gone through an Automated Underwriting System (AUS). In the meantime, this list will help you prepare and 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.
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.
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.
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 prevent fraud and money-laundering by verifying a borrower's eligibility to borrow money in the United States.
DOCS: A 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 titles and salary.
DOCS:
- W-2's for the last two calendar years.
ALT DOCS: With your written permission, we can request a Verification of Employment (VOE), but lenders aren't required to accept them unless specified in an Automated Underwriting System (AUS) approval. Some employers now charge borrowers a fee for providing the VOEs.
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.
ALT DOCS: A signed letter from your CPA on company letterhead, recently dated verifying your self-employment for a minimum of 24 months or as required by AUS.
SALARY OR OTHER INCOME DOCUMENTED ON 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.
ALT DOCS: With your written permission, we can request a Verification of Employment (VOE), but lenders aren't required to accept them unless specified in an Automated Underwriting System (AUS) approval. Some employers now charge borrowers a fee for providing the VOEs and some can take several days to complete and return the VOE.
IF YOU ARE SELF-EMPLOYED -
INFO: Proof of Self-Employment (S/E) Income
DOCS: Two years' Federal tax returns and Year-to-Date (YTD) profit and loss statements (may require CPA signature), for both company and personal, if filed separate.
NOTE: Per mortgage guidelines, a person is considered 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 tax returns will be needed even if you were issued a W-2 by the business.
IF YOU EARN INCOME FROM: Commissions, Overtime, Bonuses, Partnerships, Rental Properties, Trusts, Notes Receivable and/or Interest and Dividends.
INFO: Proof of Self-Employment and Self-Employment (S/E) Income, Contact info for CPA.
DOCS: Business licenses for current fiscal year and last two fiscal years.
IF YOU ARE EMPLOYED IN A FAMILY BUSINESS -
INFO: Verification of consistent, legally-earned income.
DOCS: Personal Federal income tax returns and all schedules for the past two years.
LIQUID or SEMI-LIQUID ASSETS:
INFO: Current asset information 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 owner's name (you), the institution name and the account number. If not, we'll need hard copies to support the information.
ALT DOCS: We can request a Verification of Deposit (VOD) or Verification of Asset (VOA) from the financial institution. Lenders will accept VODs and VOEs, but some institutions now charge the account holder a fee to provide them. Turn-times can run several days.
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.
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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