Houston Heritage - Diego Jaramillo, Realtor®

The loan application is usually the most frightening part of the Buying Process.   One question I get asked frequently is "What should I expect when applying for a loan?".  The following information are things to consider when applying for a good loan for your next home.  It is usually recommended that you get a pre-approval letter to submit with your offer to present a solid offer to the Seller.   Preparing in advance will make the loan application process flow quickly.

 What a Loan Officer May Ask For

1. Copy of EXECUTED Earnest Money Contract (Signed by ALL Parties)
2. Breakdown of Tax Situation
3. Amounts of taxes paid in previous years (2-3 years)
4. Name, phone number, address and email address for your real estate agent.
5. Name, phone number, address and email address for your attorney (if applicable).

Verifying Employment

1. Social Security number for borrow and co-borrower (if applicable).
2. Income tax statements and copy of W-2 or 1099's for previous 2 years
3. Names and mailing addresses of employers for past few years (sometimes up to 4 years).
4. Proof of other income (Social Security, Retirement, VA, Disability, Trust, etc).
5. Copies of Recent Paycheck Stubs

Self Employed

1. Personal, partnership, S-Corp and/or Corporate tax returns for the previous two (2) years inclusive of all schedules.
2. Current, signed and dated, year-to-date financial statements, including balance sheet and profit and loss statement.

Have a Pension or Social Security?

1. Pension award letter, pay stubs, and any forms showing duration of payments.
2. Provide a copy of your award letter along with a recent check stub or copy of a bank statement if the funds are deposited electronically through direct deposit.
3. Provide 2 years of 1099s

1. Checking Accounts
2. Savings Accounts
3. Paid Out Accounts (if paid recently and is attributed to major credit - automobile, furniture, home improvements, boats, etc.)
4. Status of Current Accounts (charge accounts and monthly installments)
5. Retirement Funds
6. Profit Sharing Information and 401K
7. Life Insurance
8. Stocks & Bonds (Identification Numbers)
9. Money Market

Other Assets

1. Car Information (current value, how much you owe, make, year of all motor vehicles)
2. The value of any Significant Personal Property
3. Any Other Cash Value Assets
4. Amount of Life Insurance coverage and cash value (if any)

Other Properties

If you own a other property, you will need to disclose it.  If it is a rental property, you need to furnish a copy of a rental/lease agreement for it.  You may need to present listing agreement or contract on existing home being sold.  If you have previously had a mortgage or have one now, bring the information as to the type of loan.  You need the loan number, name and address of mortgage company and the payments you make or made.  If refinancing, bring your previous Settlement Statement, Note, Title Insurance Policy and Survey (if you have it). If you are renting, you need to provide the name and address of your current landlord.  You may also need to provide proof of rent payment of copies of cleared rent checks.  If new construction, provide plans/drawings and specifications, copy of the builder's contract, copy of settlement statement from the land purchase (if owned less than one year).

Your Liabilities

Your credit report will most likely list your obligations. But it’s also a good idea to prepare:
1. A list of all your debts (loans, credit cards, student loans, bills).
2. Include name and address of lender, account number, account balance and monthly payment.
3. An explanation of any past credit issues
4. Full details about any bankruptcy filed in the past seven years
5. You can obtain a free credit report for each borrower at www.annualcreditreport.com
6. Written explanation of credit anomalies, including: late payments, credit inquiries within the last 90 days, charge-offs, collections, judgments and/or liens.

Child Support & Divorce

If you are legally divorced or have children from previous marriages, you may need to provide the amounts of child support paid, when received etc, copy of court order and ages of children. If you are divorced, you need to have a divorce decree to verify amount received if any. You need a copy of Divorce Decree, Separation Agreement and all addenda for all divorced parties. If divorce is not final, please provide a copy of the temporary orders.

Gifts & Additional Money

If you are going to be given a gift from a family member, make sure you have a gift letter.  Your loan officer may provide you with a sample gift letter for you to use.  The letter must state the relationship between donor and recipient.  There is no expectation of repayment of gifts. It is usually a good idea for you to have the money transferred in advance so the lender sees it seasoned.  You may need to provide a copy of the statements - both sending party and yours to prove the transfer to your account.  Be upfront with your loan officer regarding any gifts being given to you for the purchase of your home.

VA Loan Qualifications

If you are a Veteran, you need to bring a copy of your DD-214 discharge papers (also known as separation papers).  You will also you need to request a copy of your certificate of eligibility.  If you don't have these, ask your loan officer if they have worked with VA Loans before.

Relocations & Relocation Companies

1. Relocation agreement (if you were transferred to the area).
2. Proof of Offer Letter
3. Proof of Previous Employment
4. Monetary Moving Incentives

Miscellaneous

1. If you filed bankruptcy within the last 7 years, provide a copy of your bankruptcy papers.
2. If not a citizen, copy of green card or valid work permit/visa
3. A check to cover the cost of your credit report and appraisal.
4. You shouldn't have to pay an application fee).
5.  If you were a full-time student during the last 2 years, a copy of your diploma or transcripts.
6. Copy of photo id for borrower and co-borrower (if applicable).

Other Things to Consider

It is not uncommon to have additional requests for documentation.  Every situation is unique and additional information may be required, depending upon your specific situation. It is very important to maintain constant contact with the loan officer during the process to confirm they have everything they need.   Having the information handy will allow for less conditions to be placed later on and preventing financing approval.

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