Closing your Tennessee Mortgage loan by November 30th, 2009. It used to be that closing a loan was a relatively simple process. Call the local Nashville lender, give them the information and within a few minutes they were going over options and planning a closing date. Within the past 18 months most of this has changed. How can you, the borrower, help make sure your mortgage loan closes on time?
Be Prepared. These are the items your loan officer is going to need to process your loan. If you have them ready when you meet it will help tremendously.
Application information -
- Residency. We have to go back 2 years from application. All addresses where you have lived. If renting please have the name and contact information for you landlord.
- Employment. All jobs held in the 2 years prior to application. Please have the telephone number and address for the employer. In the event the employer is no longer in business we would need the address only.
Income –
- 2 most recent paystubs. All jobs you currently hold. If you get you paycheck deposited directly into your bank account you will still get a paystub from your employer. They are required to provide this. You may have to ask HR for help if you do not already have access to these.
- 2 most recent years W-2 forms and 1009’s if paid as a contractor. All forms.
- 2 most recent years tax returns – complete. With all Schedules. Be sure to sign page 2 of the 1040.
Assets –
- Liquid or semi liquid. Bank accounts, checking and savings. Stocks, bonds, money market accounts. Retirement accounts, 401K and IRA. The underwriter will be looking for the most recent 60 days. On most checking accounts the statements cover a 30 day period. They will want to see the 2 most recent statements. For account statements that cover 90 days they will want to see the most recent. All accounts, all pages. (If it says page 1 of 6, then they want all 6 pages even if it is blank.) They are looking to see that the money you plan to use to put down is yours and is not a loan. This is referred to as source and seasoning.
- Gift funds- the down payment can be in the form of a gift. If it is a gift you will need to show where the money came from. That is was their money to give. And both parties will have to sign a gift letter attesting that it is in fact a gift and will not be required to be paid back at anytime in the future. The best way is to have the gift funds provided to the borrower in the form of a certified check. Have the person giving the finds listed as the remitter. Make a copy of the check and the deposit slip.
- Be prepared to explain any large deposits into your asset accounts. The underwriter will want to know where the deposit came from. That is an acceptable source. (Not a loan.)
Letters of Explanation -
- In cases where the paper trial is not clear of if there are items that need to be clarified for the loan officer and the underwriter you will be asked for a letter of explanation. Just a simple letter explaining what happened signed by the borrower.
- For credit issues please be prepared to furnish supporting documentation for any items that you may need to dispute. Talk to your loan officer. Not all derogatory items need to be addressed.
Home Owners Insurance –
- The borrower is going to have to provide proof of coverage at closing. You may want to use the company that currently has your automobile coverage. I recommend that you shop for at least 2 if not 3 quotes. Because all rates are not the same. And when getting a quote be sure to let the Insurance Agent know that you may be willing to bring your auto policy over to their company as well. This allows for a multi-line discount. It could save you money.
Proof of Identity –
- Drivers license or state issued ID card.
Just a few more things to note –
- When making copies please be sure that they are clear copies, legible and show the entire document that is being copied. Always copy only one item per page.
- Be available to your loan officer. The loan officer will try and anticipate things at the front end of the application. Everything is gathered up front. The underwriter has no questions regarding the supporting documentation and the loan goes smoothly to closing. However there are times when documentation is not available and will need to follow or the underwriter may have further questions regarding the loan application. Or guidelines change. (This happens.) If you are available to you loan officer these items can be addressed and the file cleared to close. Notify your loan officer immediately if anything changes as far as employment or residency. Don’t open up any new lines of credit from the time you apply for the mortgage loan and the time it closes. You want everything to remain the same.
- The bottom line. When you have questions, ask your loan officer. They are in the best position to answer the questions as they relates to your mortgage loan application.
Should you have any further questions regarding the loan process please contact me, Lee Barroll, at 615-243-1301 or lee.barroll@fcmhomeloans.com.
