In my opinion, the number one way to make a loan transaction fly through the process is by submitting an Awesome Loan Package! An Awesome Loan Package is actually very easy to put together. All it takes is a little attention to detail.
Let's start with the loan application. The key idea I want you to remember is to be accurate and complete. Some items are extremely important to be accurate with. Others are very important to be complete.
You want to be extremely accurate with:
- The number of units
- Occupancy (is it your primary residence, vacation home, or investment property)
- Length of time at address (if any less than 2 years supply the former address(es) for a complete 2 year history
- Time on job (any less than 2 years supply former employer(s) with accurate dates of employment. If you have any gaps in employment, prepare a letter explaining the reasons for the gap
- Checking the Self Employed box if you owned 25% or more of a company
It is extremely important to be accurate with this information on the application because YOUR LENDER WILL FIND OUT IF IT IS NOT ACCURATE! They have extremely good quality control systems these days. If you are not accurate with this information, you will have some explaining to do! Explanations take time, and time is your enemy, especially on purchase transactions.
You want to be extremely complete with:
- Sources of your down payment and/or settlement charges
- All addresses where you have resided in the last two years
- All employment in the last two years
- All sources of income
- Listing all of your accounts that hold liquid assets (don't forget about the cash value of life insurance)
- List all real estate owned, even if there is no mortgage on a property
Being complete with these parts of the loan application is important not only because it speeds the process, but also because it can make the difference in qualifying for the loan. For example, your lender wants to know that your cash reserves are enough to make the payments if times get tough for you income-wise. Listing all of your liquid assets is a simple step to take that answers this question.
Once again, accuracy and completeness are the two key ideas to remember when completing your application. Part 2 of the Awesome Loan Package will focus on income documentation - stay tuned!
Phil Caulfield NMLS #386911 APMC #1850 has been helping people obtain mortgages since 1985. The views, articles, postings, and information listed at this website are personal and do not necessarily represent the opinion or the position of American Pacific Mortgage Corporation.