mortgage loan processing checklist

A checklist for all the items required by the mortgage lender helps keep both the loan processor and the recipient integrated and speeds up the mortgage process.

  • Income and Asset Documentation.
  • Appraisal and Home Insurance Reports.
  • Mortgage Payoff Data.
  • Proof of Homeownership or Sale.
  • Title Insurance Documents.

What you can expect to need when applying for a mortgage:

  • Mortgage application information
  • Income verification
  • Assets and debts
  • Credit verification
  • Other records

Income Documentation Verification

  • W-2s from current and past employers.
  • Pay stubs.
  • .Income tax returns.
  • Self-employed people, freelancers and independent contractors.
  • Alimony or child support.

Assets and Debts Documentation Verification

  • Bank statements.
  • Retirement and investment accounts.
  • Gift letter (if using gift funds).

Other Records Documentation Verification

  • Rent.
  • Divorce.
  • Bankruptcy and foreclosure.
  • Noncitizens.
  • Thin credit file.

Mortgage application information

  1. Details about the type of mortgage you are applying for
  2. Information about the house you are planning to buy
  3. Initial identification information about each recipient
  4. Employment information for the last two years
  5. Monthly income and household expenses
  6. A list of your assets (owned by you) and liabilities (what you know)
  7. Details about home transactions
  8. A declaration of any legal issues that may affect your financial situation
  9. Your signature, which ensures that the information you provide is true and accurate
  10. Information for the purpose of official monitoring
  11. Purchase of contracts signed by all parties
  12. Government-issued identification

Income verification

Two-year valuable W-2 form
30 days worth of salary stubs
Valuable income tax returns of two to three years
IRS Form 4506 (signed and dated)
If self-employment: income tax return, current profit, and loss statement, and list of all business debts

Assets and debts

  1. Valuable statement for two to three months for all accounts listed in the application (e.g. bank account, investment account, credit card account, and student loans)
  2. Documentation for any large deposit in an asset or bank statement
  3. Judicial decree or court order for each obligation due to legal action

Credit verification

  1. Letter of credit for late delivery, collection, judgment, or other defamatory items
  2. Bankruptcy/discharge papers in the history of credit for any bankruptcy
  3. Thin Credit File: History of Payments for Utilities, Cellphones, Cable TV, Car Insurance and Other Expenses

Mortgage loan processing checklist Overview

Mortgage loan processing checklist
Mortgage loan processing checklist-01
Mortgage loan processing checklist-02

Mortgage loan processing checklist PDF [Download]

Mortgage Application Document Checklist

Mortgage Application Document Checklist

Pre Approval Mortgage Document Checklist )

Have you ever wondered what documents you’re gonna need in order to get pre-approved for your first house? Well, it actually depends a lot on the type of income that you have. So, talk about what kind of documents you’re gonna need to get pre-approved to buy that first house. So before we dive into the documents that you’re gonna need to get approved for your first house.

So, like I was saying earlier, the type of documents that you’re gonna need to provide to the bank to get pre-approved depends on the type of income that you receive. So, the first thing you want to take care of is your income documents, okay? So if you have a regular job, for example at Apple or Google, or wherever, and you just get a paycheck every two weeks, it’s very simple, you just need your last two paycheck stubs, and your last two years of tax returns. Based on that, the bank will verify your income, they’ll call your employer, just verify verbally that you actually work there, and they’ll use your pay stubs and your tax returns to verify your income. Now if you’re a business owner, it’s gonna be a little bit different.

So, the bank is not gonna ask for a profit and loss or pay stubs or anything like that, they’re just gonna base your income off of your last two year’s tax returns. And what happens if you’re a business owner, if your income is increasing, then they will average the two years. So in 2016 and 17 if your income goes up, they average it. If your income is going down, unfortunately, they’re going to take the lower of the two. So they’re a lot more conservative if you’re a business owner because having a business can fluctuate year to year, so they’re a little more conservative based on that.

So just to give you a quick recap, if you are a W-2 employee, we’re gonna need your last two pay stubs, and your last two years of tax returns including your W-2’s. If you’re a business owner, we just need your last two years of tax returns to verify your income. Now, for example, let’s just say I’m right out of college, and I don’t have two years of tax returns or two years of income, I don’t have a work history, so that’s what the bank refers to as work history, making sure that you’re working the last two years. That’s what the bank wants to see.

But, if you’re right out of college, or right out of school, and let’s say you have six months of work experience or a year, and it’s less than two years, the bank will accept a reasonable explanation. So for example you were hurt and were in the hospital, or you’re just out of college, or something like that, that’s okay, the bank will accept having less than the two-year work history if you’re in a situation like that, and actually what I’ve recently come across is the bank will actually accept work history from other countries.

So, for example, let’s say you’re moving to the US and you have a work history in the country that you’re coming from, and you just get a job in the US, the bank will actually in some cases take your work history in another country. So again, that’s why you always want to sit down and talk to someone and go over these questions and concerns, ’cause you never know, you might be able to get a loan sooner than you think.

So, that’s that for the income portion of your pre-approval. So regardless of the type of income that you have, one of the things that the bank is gonna want, regardless, is they’re gonna want to see where the down payment to buy this house is coming from. So, if you have money, and it’s just been sitting in your savings account for two months, or more, you’re good to go.

You can just show ’em a copy of your bank statement, showing the money in there, showing that it’s been in there for 60 consecutive days, and you’re good to go. If you are receiving a gift, yes, so if you are getting a gift from a family member to buy a house, that’s totally fine. Anyone in your immediate family can gift you your down payment. So, immediate family includes brother, sister, mom, dad, son or daughter, grandparents, or grandchildren. So any one of those combinations can work.

So if you’re receiving a gift, usually what’ll happen is the person that’s giving you the gift will send the money straight to escrow, and you can show the bank that “Hey, my mom, dad, whoever is contributing to help me get this house.” So, if you are going to be using your own money and not receiving any gifts, the bank does want to see that it’s been sitting in your account for two months as I said earlier. The bank calls that seasoning, and basically, if you deposit 50,000 or 100,000 into your account and then walk into the bank asking for a loan, the bank gets a little suspicious so that’s why most banks will require a 60-day seasoning, basically showing that your money has been in your account for 60 consecutive days.

So if your income is going up, they’re gonna average it, if your income is going down, they’re gonna take the lower of the two. So, what I want, I wanted to use this opportunity to kind of talk about a new loan program for business owners or for whoever is self employed, where if you have that situation, where you have a lot of write offs on your tax returns, your income unfortunately went down from the previous year, and you find it hard to get a loan, there’s actually a new loan program that’s come out that’s helping a lot of people. It’s fairly new, it came out in the last year, it’s called the bank statement program.

And it’s basically it is what it sounds like. So, the bank will take the deposits into your business account every month and take the deposits as your income. So there are some businesses out there that will deposit $100,000 every single month, but their tax returns are negative. ‘Cause they have a lot of write-offs. Someone like that typically can’t get a conventional loan, but now because he’s showing $100,000 every single month, deposited into his bank, he can now get a loan based on those deposits.

So it’s actually pretty cool and I wanted to kind of plug that and let you business owners out there know that there is this opportunity if you’re a business owner and you have a lot of deposits but your income on your taxes are low and you’ve had trouble, help is on the way, it’s called the bank statement loan program, and of course you can, we always leave the link to schedule a call with one of our loan officers, below so if you have more questions you can always schedule a call. We’ll be happy to talk to you about that. So, just wanted to talk about that real quick, before we move on to the next thing that you’re gonna need, the next set of documents that you’re gonna need when you’re buying your first home. All right guys, so we talked about the income documents that you’re gonna have to provide to the bank.

In addition to the income documents, you’re going to have to show them where your down payment is coming from. Now, in this next part, the bank may or may not ask for documentation, it just depends on your situation. So, when you’re getting a home, your loan officer like myself is gonna pull your credit. All of your debts are gonna be listed on your credit report. So if you owe the bank, your MasterCard, your Visa, your CapitalOne, whatever credit cards, if you have a car loan, all these things are gonna show up on your credit report.

But, what if there’s a debt that you had from years ago? You had a medical bill, or you had a student loan that defaulted and went into collections, and you thought you paid, you had paid it off, and it was done, but the bank and the escrow and title company might uncover a lien that was placed against you. Yes, that’s right, a lien. A lien was placed against you, or a judgment. Are these just made-up words that I’m saying? No, they’re real. And what happens is if you have debts that you have not paid, creditors will file a lien based on your social security number.

So even if you don’t own any property or anything like that, your social security number can carry this lien into a home buying transaction. So even though you paid this sucker off, years ago, what happens sometimes is these creditors don’t take the final step. So the bank doesn’t remove the lien after you pay them. They get lazy. They got their money, and they don’t take that final last step and remove that lien off of your credit, off of your social security number. So, unfortunately, I hope this hasn’t happened to you, but there might, it might come up.

If it comes up, it’s not a big deal. All you have to do is hoping you’ve kept the paperwork, you have something from that creditor that says this debt has been paid in full, if not you just call them and get a piece of paper that says this debt has been paid. We show that to the bank, show that to the escrow and title company, and they’ll remove it from your record. So if this does come up, something like this can come up, so just be aware of it, hopefully, you’ve kept some receipts or statements or something that you can show that this debt has been paid, and we can help get it off your record completely. If it’s been paid but you don’t have proof, you can normally call these creditors and they’ll fax or email you a letter that says you’re paid in full, you’re good to go, and we just show this to the bank, and you’re all set. So, not a huge deal, but something like this could come up.

So that is pretty much it, that wraps up the documentation requirements that you’re gonna need when you get your first house. There are other documents that your loan officer will like myself is gonna take care of for you like your credit report, preliminary title report, and things like that, and we’ll take care of on our end, but as the homeowner, as the buyer, not too much to worry about, as far as documents to get pre-approved.

So, I hope you guys enjoyed this video, I hope it’s shared some insight into what kind of documents you’re gonna need going into a pre-approval, going into the home buying process.

Why Mortgage Loan Documents Checklist Is Important

Why Mortgage Loan Documents Checklist Is Important

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