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 If you are planning to buy a new home or refinance your current one there's no time like the present to gather your paperwork now.
Obtaining a loan in today's market isn't much different than it was five years ago, with one exception...the amount of required documentation has increased.
Once you apply for a home loan, you will be required to provide copies of the following documentation:
1. Most recent two-year's income tax returns and W2's - all pages & schedules must be included.
a. You will also need to provide your lender with the most recent two-years of returns & K1's for each company in which you own 25% or more of.
2. The most recent pay stub(s) for each Borrower:
a. Pay stubs must cover 30 days and include your employer's company name and year-to-date income on the stub.
3. The 2 most recent monthly bank statements for any account in which you will be using said funds for a down payment and/or closing costs - all pages of said statement must be included.
a. Bank statements must include the bank name, your name, account number, and account balance - many internet statements do not include all the required information
b. If there are any large deposits disclosed on said statement that do not stem from payroll, you will also need to provide the following "paper trail" for each deposit:
i. Copy of the check or checks that make up said deposit(s), and
ii. Copy of the deposit slip for each deposit(s)
4. The most recent investment/retirement statement IF,
a. Said funds are being used as a down payment for the purchase of your home, or
b. The home you are purchasing or refinancing is a rental property (said account can be used to meet the "reserves" requirement for investment properties).
i. Statements must include company name, your name, account number, and account balance - some internet statements do not include all the required information
5. Copy of most recent Social Security letter disclosing amount of monthly income you will receive, if applicable.
6. Copy of pension documentation disclosing amount of monthly income you will receive, if applicable.
7. Copy of current homeowner's insurance policy disclosing insurance company name and yearly premium, on each home you own (residence and rental homes).
8. Copy of the most recent mortgage statement for each home you own (residence and rental homes).
9. If you have other sources of income (i.e. Trust income, etc...) you will need to provide copies of the original documentation disclosing how much income you will receive monthly and how long said income will be provided to you.
a. If you are receiving child support you will need to provide receipts showing the income has been received regularly for the past six months and you will need to provide the court order disclosing the amount of monthly income to be received as well the date said income will cease.
b. If you are receiving income from contracts you will need to provide a copy of the signed original contract disclosing the terms AND receipts showing you have been receiving said income for a minimum of 12 months.
10. If you have had a "gap" in employment, a letter of explanation may be required.
11. If you have been at your current position for less than two years but were attending College, studying in your current field, a copy of your College Transcripts and Diploma will be required.
Everyone's situation may be different and each transaction may require additional documentation to satisfy the underwriter. Our goal is to close your loan as quickly as possible and being prepared in advance will help the process run smoother from start to finish. If you have any questions about the documentation required for a loan, please feel free to contact me any time. Have a fabulous day.
Michael Gish
Real Estate Loan Representative
P: 360.714.8805 x3056
C: 360.961.9293 F: 360.714.8815
NWLS#: 422364
MGish@BankofthePacific.com
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Does the seller get to wash their hands of the debt in a short sale? It depends on the lender and the state. Usually, lenders will not grant relief to short sellers and it's up to the seller to pay off the remaining mortgage debt not recouped from the sale. The lender can decide to forgive the debt and it then constitutes cancellation of debt (COD) income for federal income tax purposes. In some states (including Washington) some personal residence mortgages can be nonrecourse mortgages. In that instance, the lender might agree to a short sale to recoup what they can for the property before the value declines further, and cannot go after the seller for the difference between the sale price and the loan balance.
6834 Raspberry Dr
1219 Falls Loop
8106 Blaine Rd
81xx Blaine Rd
44xx Birch Bay Lynden Rd
1
January/February 2012
