Mortgage Application Checklist

                                     How to become a strong mortgage applicant...

As underwriting guidelines gets more stringent and difficult, a homebuyer needs to re-evaluate what a good
mortgage application looks like. There are few items a homebuyer should be aware before they begin to search
for a home to help get their loans approved.

1-Verification of income:
      -Two years W-2 forms, Banks want to see a stable long-term income. They also limit you to claiming as income
      the amount on  which you pay taxes.
      -Profit and loss statements and tax returns for current year and previous two years if you are self-employed.
      -Additional income: social security, overtime bonus, commission, interest income, veteran's benefits and so on.
      -Two months’ bank account statements, Buyers getting financing need to show lenders proof of regular income
      and proof that the down payment money is your own.
      -Recent pay stubs and tax returns for the past two years, most lenders want to see a full month of Paycheck-
      Stubs and two years’ complete Federal Tax Returns. Purchase price range is determined, in part, by their income.
Gathering every pay stub you get is a good idea even before you find a home or submit your mortgage application. Be
prepared to explain any deductions, child support, alimony. It can make your loan approval smoother.

2-Documents of your asset:
      -List of bank accounts, most lenders will look in your bank accounts for the two months prior to going to contract.
      Any large deposits that is more than your income it will need to be explained and documented.  If you sold a car
      or  another big item? Have a paid receipt and documents in place.
      -Gift letters. If you received a gift, you will need a Gift Affidavit, proof of the donor’s ability and transfer
      of the funds. The bank wants to be sure the gift came from a relative, and is his or her own money to give. They
      also want the relative to confirm in writing that it’s a gift, not a loan. A loan would need to be factored into
      your debt load.

3-Credit Score Optimization:
      -Minimize your use of credit as it relates to your available credit lines. Don't cancel credit cards; Canceling will
      lower your score and amount of available credit. Do NOT shop for a large purchase such as car, life insurance or apply
      for a new credit card or increase the limits on your current cards. Any thing that will require having your credit run
      discuss it with a mortgage lender.

4-Your debts:
      -Credit card bills for the past few billing periods, Other consumer debt such as car loans, furniture loans, student
      loans and other personal and cosigned installment loans with creditor addresses and phone numbers, evidence of mortgage
      and/or rental payments.

ID (e.g., driver’s license, state-issued ID, passport) is required. Lender wants to know that you are whom you say you are,
buyers, and the title insurance company wants to make sure, notary requests to see it before signing, but some mortgage brokers
and even some real estate brokers and agents may ask to see it earlier on.

Finally update everything. Why? Things change, and because the time period between the first loan application and closing can
be many months - even years! - on today’s market. During the time between contract and closing it’s not at all unusual for
underwriters to demand buyers produce updated mortgage statements, checks stubs, and such - and its quite common for them to
call your office the day before closing to request a last minute verification of employment!
There may be plenty of lookey-loos at open houses these days, but few are serious buyers. That makes it less likely you’ll
find yourself in a bidding war today with less competition. It also means you can negotiate more effectively with motivated
sellers. Once there are clear signs of recovery, demand will pick up. Being a little ahead of the game gives buyers more elbowroom.