If you’re like me, you HATE pulling together piles of documents that were probably filed under stacks of kids homework from two years ago.  Just thinking about having to find all those documents gives me the heeby-jeebies.  At Loanatik, we strive to make mortgage applications as simple and easy as possible by asking for the least number of documents and using “Big Data” when we can.  Alas, there are some times when you will have to come up with some documents that aren’t available in the cloud.

Well-meaning friends and inexperienced loan officers get way more documentation than the mortgage guidelines really require.  You don’t need to document your entire life in minute detail.  It’s really just some common sense documents that we ask for.  If you’re purchasing a home, we’re going to need the purchase contract.  If you tell us who your realtor is we can contact them directly to save you the hassle.  There are also streamline programs for both VA and FHA that make applying for a refinance a breeze.  Bottom line is that we’re here to help in every way we can and you shouldn’t let a document or two stand in the way of getting your home purchased or refinanced.  Here is a list of some of the more common documents that might get asked for, a list of some special case documents, like the mortgage documents required for someone who is self-employed or received a large gift.

Documenting Income

One of the most important parts of getting a mortgage is documenting your income.  The easiest way to do this is by providing two years of tax returns, a w2 and your last two bank statements showing that you’re still getting paid by the company.  You’ll need all the schedules and K1’s if you get them.  If you own a business you’ll have to submit the business tax returns too.  In the initial set of disclosure document that we send you, there’s a document that gives us permission to check the information that the IRS has on file.  All of this is really common sense and has become standard practice in the mortgage industry because of all the fraud we experience in the mortgage madness from 2004-2007.  The Dodd-Frank act requires lenders to fully document income.

Alternative Documentation

If you don’t have the documents we just outlined, don’t fret!  We can still document your income in other ways.  We can use bank statements and other forms of income documentation.  You might not get rates as low as someone that can easily document their income, but, you will be able to get a mortgage.

Documenting Unusual Transactions

If you receive a large gift, typically a deposit of more than 10% of your total income you’ll probably have to document where it came from.  For example, if you received a gift from someone you’ll have them sign a form letter that says they gave you a gift.  What the underwriter is trying to make sure is that you didn’t borrow a large sum of money that has to be paid back, which would change your debt-to-income ratio.  Other large deposits, like quarterly commission checks, also have to be documented, but, those count toward your income if you can demonstrate that the income has been stable in the past and likely to be stable in the future.

Some more special cases:

• Child Support.  We have to document income from child support or alimony.  Typically, we’re going to need the decree showing child support or alimony and some evidence that the payments have been made consistently.
• Self Employed & Commission Income.  If you’re self-employed you’ll have to supply the tax returns for the business for the last two years.  We’ll probably ask for a year to date profit & loss statement and balance sheet as well.
• Bankruptcy.  A bankruptcy can make things more complicated.  You’ll certainly have to show the court documents showing that the bankruptcy has been discharged, the reason for the bankruptcy and a variety of other documents.  Your credit report will also have to show that your credit has been clean since the filing.  There are also waiting times after a B/K has been discharged before you can get a loan from Fannie Mae or Freddie mac.
• Foreclosure.  You’ll be able to get an FHA mortgage just 2 years after the foreclosure completes.  You can get a conventional loan after 7 years.

Making Mortgage Easy

With incredible numbers of really smart programmers, Loanatik is leading the way to fully automating mortgage applications, processing, and underwriting.  All of this means that your application will get easier, closing cost will become more affordable and closings will be faster.  Don’t let outdated advice and ghosts of mortgage past haunt you into not applying.  We really can help and make the process as easy and painless as possible.  You can start saving money by filling out the quick and easy loan application.

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