Be Prepared

August 26, 2009 · Posted in News For Homebuyers

True for the Boy Scouts, and true for anyone and everyone looking for home financing today.

Much has changed in the mortgage world in the last few years, and our last year has seen the most changes yet. Underwriting guidelines have gotten much more stringent, and processing times have lengthened. A good loan officer these days will look for ways to trim down the time between application and closing, but the loan officer can only do so much. Borrowers, the easiest thing for you all to do is to GET PREPARED. If you are looking for a home, or refinancing a current one, gather your documentation before you even start shopping. Why? Having everything ‘at the ready’ will enable you to move fast when documents are requested. It will make you feel LESS stressed about the process by knowing what will be required, and what is expected from you.

Remember taking tests in school? The nerves were always worse, and the test always more frustrating if you were NOT prepared. So do yourself and your loan officer a favor, and gather up all the documents listed below. Note: your lender may request some or all of the documentation listed below. It’s always better to be on the safe side.

One month of pay stubs (all borrowers)

2 years w2’s or 1099’s

2 years Federal Tax returns (with signatures!) If self-employed or if you have income from investment properties. Include all schedules.

2 months bank statements (ALL PAGES) from ANY account that will be used for the transaction. Also, it’s a good idea to show SOME assets on a refinance, but there is no need for your IRA and stocks and bonds and all of that. That would be overkill, just use what’s necessary to qualify, and maybe a little more.

Copy of divorce decree or separation agreement, if you are divorced, receive or pay alimony or child support etc. VERY IMPORTANT to have this on hand.

Copy of canceled checks for deposits on a property OR gift funds. Document every step of the way if you are using a gift- that could even mean a bank statement from the person who is giving the gift! Paper trail, paper trail, paper trail. Remember those two words.

A copy of your HUD Closing Statement from the purchase of your home, if you are refinancing a second mortgage that was used in the purchase.

As you can see, the amount of paperwork does look rather daunting. But it’s not that bad- most of this stuff you may not even need. Discuss your file with your loan officer to find out what to expect, and which documents will likely be requested. If he/she doesn’t know, and wants to wait for it to come out of underwriting, well… I hope you like waiting.

Be proactive, be prepared, and you will close with ease.