To qualify for a real estate mortgage, you have to be able to verify income, credit, assets and collateral. Over the last few years, all we really needed was a w-2 for the previous year, a paystub and a bank statement – sometimes we didn't even need that. Now we are back to needing as much documentation as possible.
When you are getting ready to get a new mortgage, make sure you have 2 recent paystubs, your federal tax returns for the last 2 years along with the w-2's, 2 months of bank statements – all pages. If you receive child support, you will need a court decree to document that. For retirement income, we will need an awards letter and up to 3 months of bank statements.
Look at your bank statements, if there are any large deposits, be prepared to show where that money came from. If you sold something, you will need to show proof that you sold it – title transfer, etc. You are not allowed to black out any account numbers or social security numbers. We also need all pages of the bank statements – the last page or two may be some type of advertisement, but the underwriter doesn't know that – they want to see all pages, if the statement says 1 of 7, you will need 7 pages.
If your paystubs show overtime, we will probably need to get a written verification of income to show that the overtime will continue. The same thing is necessary if there is bonus income.
Don't transfer money between accounts if at all possible – we have to track where the deposits come from and if they are moving between accounts, it makes it more difficult to determine the actual amount in the bank. Bank statements may not be dated the same day, so we may need additional statements if you are doing that.
The appraisal will determine the value of the property. After the appraisal is done, most of the time the investor requires a computer report that also gives a value to the property. Sometimes this will come back needing an additional report on the property – it can cost an up to $275 on top of the cost of the appraisal. If you are buying an home that was flipped (bought, rehabbed and sold), you may need an additional appraisal depending on the original sales price and sale date.
While you are in the process of getting a mortgage, try to keep all your records – don't pack any of your financial records as the underwriter may have a last minute condition that you will need documentation for. Keep your credit report clean and don't open any new accounts. Keep your paystubs and bank statements – we will need to verify your earnest money, so be prepared to provide that bank statement.
We try to ask for everything we may need in the beginning, but unfortuantely sometimes there are surprises and at the end we need additional documentation. Make sure you ask your loan officer if you have questions.
