Wednesday, January 27, 2016

Required Mortgage Documents

We know buying a new home can be intimidating, especially for first time buyers. Loans, taxes, interest rates, insurance and all the paperwork that comes along with them can seem overwhelming.

Here is a list of paperwork you’ll need to help the process go more smoothly.

• W-2 forms for the previous 2 years
In most cases, the most recent W-2 will suffice. If you receive overtime or any bonus income you wish to include for qualifying purposes, you will need to provide 2 years of W-2 forms.

• One month of paycheck stubs
The mortgage company’s purpose in obtaining all of this paperwork is to ensure that you are capable of repaying your loan. Loan guidelines typically require proof of one consecutive month of income with pay stubs. If you are paid electronically, ask your HR representative if it’s possible to access a corporate website to print your stubs.

• 3 months of bank statements
One of the easiest pieces of documentation to attain will be your bank statements for the last three months. These documents will be examined for any large deposits. The source of all large deposits must be documented. Remember to include all pages of your bank statements - even if they are blank.

• Tax returns for the last two years
In many instances, you will be required to submit the previous two years’ worth of tax returns with all of the pages included. you will be required to sign IRS Form 4506-T which allows the lender to obtain a copy of your returns from the IRS. This has become industry standard fraud prevention.

• A list of all debts
Most of the documents you provide will be to prove your income to lenders, but a list of debts tells them how much you owe. This documentation is key to calculating your debt-to-income ratio. Debts include credit card payments, student loans, child support, rent/mortgage payments, etc.

• Recent statements for security accounts
It can be helpful to your loan application to document additional assets, such as stocks and bonds you’ve purchased, investments made in your company’s 401k or life insurance. You will need to submit statements to verify these accounts. Having security assets lets lenders know that you have enough to cover any large unexpected expenses that would otherwise prevent you from making your payment.

• A list of additional assets
Assets aren’t just stocks and saving accounts, they also include material items with significant value, such as a boat or land. Make a list of any additional assets and come prepared with documentation.

• Cancelled checks for one year of rent/mortgage payments
This may be proven through your bank statements, but some lenders may request cancelled checks for your rent or mortgage payment for the last 12 months. This will show that you have been responsibly paying on time each month.

• P&L statements or 1099 forms (business owners only)
During the housing market boom, many self-employed borrowers were able to secure loans with little to no proof of income. Eventually, these sub-prime loans are what lead to the housing market crash in 2008. Business owners are now required to submit a current-year profit and loss (P&L) statement or a 1099, depending on when you file the loan.

Planning ahead by having all of your documents prepared, being organized, following the 5 Financial Don’t for Homebuyers and responding quickly to requests from your lender will ensure you get into your new home as quickly as possible. For your convenience, we’re created a free downloadable checklist of the paperwork you’ll need to provide your mortgage consultant.

We understand a mortgage is usually one of the largest financial transactions of a person’s life. That is why HUNT Mortgage provides all of our New York, Florida and Arizona customers with personalized, quality service. We offer a variety of products, and our mortgage consultants are trained to assist borrowers in selecting the best mortgage program to meet their own unique financial situation. Contact us today for more information.