Application Documents

Step one in the application process is to document your income.

 

If you are a wage earner we will need at least your 2 most recent pay stubs, the last two years of W-2's and the last two years of 1040's (the first two pages of your federal tax return).

 

If you receive retirement, Social Security and/or disability income we will need your Award Letter. This is the letter you get toward the end of the year that states how much you will receive per month in the coming year. If these funds are direct deposited into your account, please include your most recent bank statement showing that deposit.

 

If you are self-employed or write-off expenses we will need your complete federal tax return. This includes all schedules and addendums but no worksheets. 

 

If you receive alimony and/or child support we will need you divorce decree or legal document stating that your ex has to make these payments.

The next step is documenting your assets.

 

Every lender will want to know that you have enough liquid cash to close and where those funds come from. To that end you will need to submit the two most recent months statements for any cash accounts you are planning to use to close on your loan.

 

These accounts include checking, savings, investment and retirement accounts. You will need to submit ALL pages of these statements, even if the a page is blank. If you submit pages 1, 2, and 3 of a 4 page statement the first thing the underwriter will think is, "What's on page 4 that the applicant doesn't want me to see?".

 

Underwriters will want further documentation for any "large" deposits. So, as an example, if you borrow funds against your retirement account, and deposit it into your checking account, you will need to document the withdraw of funds for the underwriter.

 

There are countless ways borrowers get funds to close. Make sure to discuss the source of your funds with your loan officer. It can save a lot of running around days before closing.

Now let's talk Credit and Credit Scores.

 

Prior to credit scoring it was very common for any lender to pull a person's credit report while they first spoke to them. That is no longer the case, or it should not be the case.

 

As you may know, excessive credit inquires from a lenders can bring down your credit score. How many is too many? It all depends on your current credit profile. Borrowers will great credit (720+) could have several inquires with little to no effect on their scores. It's the borrowers that are in the low 600's and below that need to careful.

 

If you are going to be shopping for a loan, run your own credit report and get your scores. You will never lose points for running your own report. Then when you speak to a lender you will have the info they need.

 

Where can you get them? www.annualcreditreport.com is my favorite. This is the site that the 3 credit repositories (EquiFax, TransUnion and Experian) set up so we can all get one free report from each of them per year. If you want your credit scores you will need to pay for them. 

 

Keep in mind that the credit scores you see on your report may not be the same scores that your lender sees. There are many "models" for credit scores and the mortgage industry has it's own model.

Lastly, the details of your Land and Home.

 

So, first question, do you already in title to the land you plan to build on? If the answer is yes, then I need a copy of the Settlement Statement that you signed at the title company when you bought it. A copy of the deed, title policy and/or a survey would all be helpful. If you purchased the home on a Land Contract, we will need a copy of that.

 

If you do not own your land yet, but have a purchase agreement to do so, we will need a copy of the purchase agreement. Once again the title commitment and/or survey would be a big help.

 

Eventually we will need a copy of the agreement you have with the builder along with the plans and specs for the home. The plans should be reduced down to letter or legal size paper. If you don't have this yet please send the other docs and get this to us as soon as you can.