The mortgage stories in the news that continue to dominate the headlines always revolve around the “tightening” of credit and how hard it is to obtain a mortgage these days.
We still field phone calls daily where the person will say, “The last time I did this, it was not this hard and they did not ask for all of this information.” Keep in mind that it has been this “way” now since 2008. Almost 8 years!
I have listed below the most common items an underwriter asks for that drives people nuts.
Bank Statements
• In this internet/tech-savvy world we live in, folks always want to use internet printouts of their bank accounts instead of actual bank statements. These printouts typically do NOT show your account number and/or your actual name for security purposes. You can usually pull your actual statements from most banks online, but if not, you will need to make a trip down to the bank. If the bank will only provide printouts, then each page must be signed, stamped, and dated by the bank representative.
• All large deposits not direct deposited from your payroll must be proved with a paper trail and explained. For example, if you have $500 deposited into your savings account, be prepared to show a copy of the check that was deposited and write a quick explanation of what it was for. You may have to go to your bank to obtain a copy of the check.
• Most bank statements have a blank last page or perhaps a page two with either nothing on it or nothing you would consider relevant. This page will be required from the underwriters.
• Your Earnest Money Deposit (EMD) check must clear your account if you want credit for it at the closing table. Make sure your realtor has deposited the EMD check ASAP, since some agents will hold onto the check for a period of two or three weeks without you knowing about it.
Income
• When providing copies of tax returns, most people want to send only the first two pages of the Federal 1040. All schedules of tax returns are required and page two must be signed and dated.
• Many pay stubs provided do NOT show a current year-to-date income. If they don’t, the lender will be required to obtain a written verification of employment form to be filled out by your employer. The underwriter must ensure that your current pay is stable.
Identification
• You’d be surprised how often the drivers license provided is expired or will be expiring in the next month prior to your loan closing. You must have valid identification at the time of closing.
• It’s a problem when the address on the drivers license does not match the address that the borrower states they live at on the mortgage application. Sometimes all that’s needed is visual verification of the sticker on the back of the ID showing the address change. If you have not updated your address, you may be required to do so or write a letter of explanation of why you haven’t.
These items should be discussed with your loan officer upfront at the time of application. This may require a few extra conversations or some back-and-forth until there is a clear agenda of what needs to be done. Again, your local mortgage broker has the experience and customer service background to help you so you don’t feel like you’re getting the runaround.
This guest post was written by Kirk Chivas. Kirk is a licensed Loan Officer and co-owner of First Commerce Financial, LLC, a mortgage brokerage based in Wixom, Michigan. With over 17 years of experience, Kirk has committed to providing Michigan residents with accurate and honest mortgage advice. If you have any questions about your current or future mortgage needs, please feel free to ask Kirk a question on Twitter.
Albuquerqueans, when you’re ready to speak to a lender about getting pre-qualified for your new home, contact one of my professional mortgage brokers. And if you have any questions about selling or buying a home in metro Albuquerque, be sure to contact me today!
biz page or profile.