A house is likely the biggest purchase you’ll ever make. It only makes sense that you would need a lot of documentation to apply and get approved for a mortgage. Greenway Mortgage, like any other lender, needs a significant amount of information to ensure we’re making the right decision.
While there is nothing we can do to reduce the amount of documentation needed to get a mortgage, we can help you avoid the mistakes that add time, frustration and stress to the process. Here are 10 of the most common, documentation-related errors that borrowers make.
1) Incomplete Documentation
For example, the first page of your bank statement isn’t enough. If the entire statement is five pages, send us all five pages, even if three of them seem irrelevant. If pages are missing, we’ll ask you to send us those pages.
2) Illegible Documentation
Scanning works best. Make sure all documents are crystal clear before sending them to us.
3) No Paper Trail
If you get paid in cash or don’t report income to the IRS, that’s a problem. If you keep your money in your mattress, that means there won’t be a record of it. We can only consider financial assets or income if they have a paper trail.
4) Missing Accounts
Applying for a mortgage requires the borrower to show proof of all financial accounts, not just bank accounts. Retirement accounts, investments, trust funds and other “non-statement” accounts must be provided.
5) Outdated Documentation
When we say that we need 30 days of bank statements and pay stubs, that means the most recent 30 days. If you send documentation that covers any 30-day period, that won’t work. We need to verify your current financial situation.
6) Unsigned Tax Returns
Borrowers often send copies of their tax returns. Very often, those tax returns have no signature. You can send copies, but they must be signed or we won’t be able to use them.
7) Address Inconsistencies
The address on all of your documentation must match the address on your driver’s license. If you go back to your parents’ house once a month to pick up mail because you never changed the address on any of your accounts, it’s time to update your information.
8) Missing Mortgage Statements
We need to see mortgage statements for all real estate owned, including investment properties and vacation homes. Without them, we can’t paint a clear and complete picture of your financial assets and debt.
9) Missing Documentation from the Borrower’s Business
If you own and report income from a business, we need documentation from the business. For example, we need a K1 form, which shows the owner’s income from the business. Also, if you own more than 25 percent of a business, we need to see tax returns from the business.
10) No Authorization to Use Joint Funds
Let’s say you have a joint account with a family member or significant other. If you plan to use money from that account when you apply for a mortgage, you have to provide a letter of authorization for use of joint funds from the other owner of that account. We will help you draft that letter.
NEXT STEPS…
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