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Oct 02

Mortgage Helpful Hint #1

Mortgage Pre-Approval Stage

A Pre-Approval Letter is worthless if it isn’t backed up with the proper support documents!

Making a mistake during this stage can be time consuming and very costly because home inspections, termite inspections and appraisals are expensive. 

Take the time to gather all of the support documents needed to properly decision the pre-approval.  Underwriters are not allowed to clear loans to close without support documentation in the file. This issue delays the process more than all other issues combined and makes it very stressful for the borrower. I address this on the front end which eliminates most of the stress!

 Everything Takes Time

Every line on every document must be reviewed by 3 people before the loan can close so it takes time to get a document processed.  The faster you submit the support documents the faster it will move along.  The closing timeline will push back at least one day if something is missing.  If multiple items are missing it pushes back the time line until after the last item is submitted and reviewed by all 3 people.  ONE missing document is almost as bad as no documents at all. 

Here is a list of what is needed to properly decision most loans:

 1. W2’s & Federal Tax Returns for the most recent 2 years for everyone on the loan, 3 years if using a KHC Mortgage.

2. Pay Stubs covering 1 month.

3. Most recent two months of (bank) statements for any account you intend to list on the application. We need all of the pages, not just the summary page. If the statement says Page 1 of 5 on the first page we need all 5 pages, even if the last one is blank. Hint: do not leave off any accounts, the automated system counts funds even if not used as down payment, so include retirement, 401k, IRA’s etc.

4. A copy of the sales contract if you already have one, if you are selling a home we will also need a copy of the contract on the one you are selling.

 Self Employed – For borrowers that are self employed or own more than 25% of the company they work for we will need all of the items above plus:

 1.Year-to-date earnings

2. Two years corporate tax returns

3. Year-to-Date Corporate Profit & Loss

 Divorce – If anyone that is going to be on the loan is paying or receiving child support or

alimony we will need a copy of the divorce decree and property settlement agreement.

 Bankruptcy – If anyone that is going to be on the loan has filed bankruptcy within the

previous 7 years we will need:

 • Discharge of bankruptcy

• Schedule of creditors (secured or unsecured)

• Detailed explanation from the borrower (I help with this)

 

Fax the Support Documents to: (502) 753-4727 (No cover sheet needed).

Or scan and email them to: JSimms @ cmcloans.com

My goal in sharing these Helpful Hints is to make your experience as pleasant as possible. Doing it the right way from the beginning is only way to make this happen.  One missing page on one document stops the process, take time to gather all of the pages on the front end.

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