By Mark Steele, Prime Lending
You have decided to purchase a home and you would like to the loan process to be quick and easy. Here are some tips to help you through the mortgage loan process.
There are times when requesting needed documents from my clients they have asked the question, “Would you like my first born as well?” Although in today’s lending environment there is more documentation needed, the process doesn’t need to be cumbersome. The first step is to choose an experienced mortgage lender. A professional mortgage lender is worth their weight in gold. The right lender will assist you in choosing the loan program that best suits your needs. Experienced lenders are well versed in current guidelines, know the proper documentation needed for your specific loan program and communicate well with you the client.
There are a variety of loan programs today. Conventional loans are typically sold to Freddie Mac or Fannie Mae with a loan limit of $424,100. Jumbo loans are usually sold to the larger banks with a maximum loan amount of $3Million.
The lender should provide you with a list of documents needed for your loan approval. Once the request has been made make it a priority to gather the requested documents within 2-3 days. Once you have everything, your lender should be able to provide a secure email or website to upload the docs. Make sure the documents are clear and legible. If a document is not readable it will slow down the loan process and you will be asked for a clear copy.
Also, it is important to include all pages to a document. If a document states there are 10 pages underwriting will require all 10 pages even if some of the pages are blank.
Typical documents needed are 2 years W2’s, 30 days of paystubs, 2 months of bank statements and picture ID. If you are self-employed, have rental properties or using interest & dividend income, 2 years of Federal Tax Returns will be required. Homeowner’s insurance with minimum coverage equal to the amount of your total loan or the replacement value of the house will be needed prior to closing.
Most lenders strive for a good experience for all involved. Their business is dependent on great reviews and referrals from business partners and past clients. Once your loan has closed consider posting a review on Social media regarding your experience with your lender and realtor. Both will be very appreciative.
Dos and Dont’s
DO notify your lender of any salary or other compensation changes from what is noted on your application.
DO notify your lender of any changes to your employment such as maternity leave, sabbaticals or leave of absence.
DO keep documentation (paper trail) on any large deposits into your account: copies of all paperwork necessary to prove a financial transaction, including all checks, deposit slips, loan paperwork, forms to liquidate assets, etc.
DON’T acquire any additional credit lines or make any large purchases on existing credit without first notifying your lender – buying a car or buying appliances for your new home with change your debt to income ratios.
DON’T change jobs without notifying us – a change in compensation may affect your ability to qualify and lenders are required to verbally verify employment within 10 days prior to closing.
DON’T co-sign with anyone to obtain a line of credit or make a purchase – it will show up on your credit report as an additional debt and increase your debt to income ratios. This also creates more work for all involved working on the loan approval which in turn, could slow the process.
Mark Steele is a Mortgage Lender/Production Manager with PrimeLending’s Wauwatosa office. Mark lives in Wauwatosa with his wife Laura and 3 children Gavin, Alton & Alma.