I hear all the time from clients that, “It wasn’t this way the last time I bought a home”, “Why do I have to give you all those bank statements”, or “It is my money, why do I have to prove it?” My answer is the world of finance and mortgages has changed since the downturn of 2008/2009. Nothing is the same. The requirements from the government and investors are intensified, and all documentation requested is a required condition. Whether you are a first time home buyer or a more seasoned client, the information gathered is to get you into your dream home as quickly as possible.
At times, clients will request that an interest rate be quoted before loan application. Interest rates are based on several items including the strength of the file, e.g. credit scores, assets, credit history and loan to value. If lenders are quoting rates during the first conversation, they are simply pulling them out of the air and are doing you an injustice. Reputable lenders will not quote without knowing your personal loan profile.
Most loans require that the debt to income ratios don’t exceed 31/43%. But depending on the loan program, and again the strength of the file, those ratios can be higher at times.
A few of the items you will need to provide in order to process your loan are:
Tax returns for the most recent 2 years, all schedulesW2’s/1099’s for the most recent 2 years for all jobs heldBank statement for the most recent 60 days, all pages for all accounts
Any deposits over $500 will have to be sourced by providing documentation as to where the funds are fromPaystubs for the most recent 30 daysMost recent retirement statement, all pagesPhoto ID
Make sure once you have started the loan process to sign and return your disclosures promptly and by the needed times. Also, any additional items requested should be delivered to the lender in a timely manner. The loan should be able to be started, closed, and funded within 25 to 30 days if you are diligent about getting items to the lender and if you have selected a reputable lender. Please know that the loan process is not an easy process, but it can be an enjoyable and fun time if the team you partner with is experienced and efficient.
Article Written by: DiAnne Acuña, NMLS #219210