A 5 minute read that will save you 5 days in the loan process!

 

A 5 minute read that will save you 5 days in the loan process!

 

You are in contract. You have all types of deadlines: property inspection, loan contingency, close of escrow, etc. Let’s face it – this process is stressful!http://www.clipartguide.com/_pages/0511-1103-0212-0510.html

How can your stress be reduced? One way is by working with a mortgage lender  who lets you know upfront about what you will need to provide beyond the obvious: paystubs, W-2s, and bank statements. 

Here are ten action items you can perform prior to making an offer to mitigate the stress during the escrow period.

1.   Are you a renter? – provide the most recent 12 months of cancelled checks (copies of the front and back of the check), and/or the name of the property management company.

2.   Are you going to hold title in a trust – dig out a copy of your trust (along with any amendments).

3.   Are you going to use retirement funds for either the down payment, closing costs, and/or cash reserves – provide a plan summary that documents the terms of withdrawal (this usually takes some searching, so be prepared!).

4.   Are you going to use funds from a bank account of a business you own? Provide a letter from your tax preparer stating that the withdrawal of these funds will have no negative impact on the day –to-day operations of the business (this can be a deal killer because tax preparers do not like to write this letter – it puts them on the spot!).

5.   Look at your bank statements – do you have non-payroll deposits that cumulatively add up to greater than 20% of your income? Provide copies of these checks along with a written explanation of each check deposited. Bank statement

6.   Do you own other real estate – provide copies of the tax and insurance bills for these other properties because the lender will include these payments in your debt-to-income ratios.

7.   Is your income on pace to be less than your income from the previous year? Write a letter explaining why your income has declined.

8.   Do you own your own business? Prepare a year-to-date profit and loss statement.

9.   Are you getting a gift for the down payment and/or closing costs? Get a gift letter, a copy of the check, a copy of the deposit receipt into your account, and a current bank statement from the gift giver from the account the check was written from.

10.               Most important! – Respond quickly to your lender’s requests! Time kills transactions! Instead of bellyaching about the documentation requested – focus on the big picture – you are going to own a new home!

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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.


Comment balloon 5 commentsPhil Caulfield • November 30 2012 10:43AM

Comments

This is a great list for home buyer's to read they must be prepared and work with the lender in order to have a successful transaction.

Posted by Pat Champion, Call the "CHAMPION" for all your real estate needs (Coldwell Banker Camelot Realty) about 6 years ago

Thanks for the comment Pat! Please pass on to your homebuyers.

Posted by Phil Caulfield, I Get The Loans Done That The Big Banks Don't! (Guarantee Mortgage) about 6 years ago

Great information, Phil. There is so much buyers can do, and if they aren't asked for it they likely won't even consider it. These days there are all sorts of documentation issues that come up, usually just before closing when the underwriter is delaying until they get X.

Jeff

Posted by Jeff Dowler, CRS, The Southern California Relocation Dude (Solutions Real Estate ) about 6 years ago

Phil,

Very informative blog for all buyers. Being proactive is usually the best way to go. It saves time, energy and diminishes stress during the transaction.

Sarah

Posted by Les & Sarah Oswald, Broker, Realtor and Investor (Realty One Group) about 6 years ago

Jeff - unfortunately delays happens that can easily be avoided if the loan officer tells the borrowers upfront what they will need to provide.

 

Sarah and Les - stress does no one any good. I agee, much better to be pro-active!

Posted by Phil Caulfield, I Get The Loans Done That The Big Banks Don't! (Guarantee Mortgage) about 6 years ago

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