The mortgage world has definitely changed over the last couple of years and it isn't as easy as it used to be to get a mortgage. But it is still possible!! We have gone back to the basics that we used to follow and just need to make sure we can document everything. When you are thinking about buying a home or refinancing, you will need to make sure you can get your lender the following:
- Recent paystubs (covering a 30 day pay period)
- Bank statements (2 months)
- w-2's and federal tax returns for the last 2 years
- Divorce/court decree (if applicable)
- Bankruptcy/foreclosure documents (if applicable)
- VA documents if a VA loan (DD214 and certificate of eligibility)
- Copy of your drivers license (or government ID for the Patriot Act)
- Explanations of credit inquiries, late payments on your credit report
Some of these items may not be needed, but don't be surprised if your loan officer asks for more information. We have to be able to document 2 years of income and we use the w-2's, paystubs and tax returns to do that. If you have been in school, we will need copies of your school transcripts. We have to be able to document the money used for closing, bank statements will be needed for that. If there are large deposits, underwriting will want an explanation and documentation on where the funds came from.
Your loan officer will give you options of different types of loans to see what works best for you. You want to make sure you understand the programs and different fees/rates that there are. Most people these days are getting either FHA or conventional loans, typically 30 year mortgages when you are buying a home. Many are refinancing to a 15 year loan, but it all depends on what is best for you.
Ask questions but be prepared to give more documentation than you have had to in the past! The more documentation we can provide to underwriting the easier it is to get your loan approved!! Underwriting needs to make sure that you have the ability to make your mortgage payments!