Monday, April 21, 2014

Buyer Tip: Basic 2014 Loan Document Requirements for Home Buyers

The Spring real estate market has finally arrived, and Buyers who have been on the sidelines all winter long are beginning to act fast!

While presenting a contract to a Seller only requires a basic loan preapproval, a lender requires extensive documentation from a Buyer to actually process a new home loan upon contract acceptance.  Want to get ahead of the game?  Begin to compile these documents at the beginning of your house hunt! 

As inventory is currently at a historic low in St. Louis, often times a Buyer has to write a contract on the very same day it is listed or it is gone within hours!  This process doesn't leave Buyers with a lot of time to think or act.  Beginning to compile the documents required for verification of employment and income prior to writing a contract will save you a lot of time and headache.  You will be thankful that you did so after you find "the one", when focus is needed on important inspections and move-day details.
Below is a basic overview of the documents required of a 2014 Buyer per Andy House of PHH Mortgage (formerly Coldwell Banker Mortgage).  Depending on the complexity of the transaction, additional documents could be required.

Last 2 years W-2’s: 
If using college education as an alternative, a copy of the diploma and official transcript is necessary.
Last 2 months bank statements: 
All pages are required-  if the statement says 1 of 5, all 5 pages in required.
Last 2 months/quarterly investment account statement: 
Same as above.
If paid income by Social Security:  
Must provide the most recent award letter and proof of 2 months of income received on the bank statements.
If paid a pension or retirement:
Must provide a copy of the pension award letter and must have 3 years of continuation of the pension in order to count it.
 If self-employed:  
Must provide the last 2 years of tax returns.  All pages and schedules are required and must be signed and dated.