Mortgage lenders always look at work history, credit score and source of down payment funds. The required financial documentation will be different depending on the type of borrower you are. As technology advances, verifications of the information put on your mortgage application are becoming faster, and therefore in certain circumstances less documentation is needed, but it’s important to know when to submit certain pieces of documentation and when not to—which may mean the difference between getting the money you need and not getting the money you need. Knowing what kind of borrower type you are may help shortcut your paperwork and allow you to prepare, so that no time is lost in reviewing your situation by your mortgage advisor.
Employee
Least amount of documentation required. Need: last two years of W-2s, one month pay stubs and two months savings statements.
Self-employed
Need: depending on the program, one to two years of individual returns and business returns and possibly a year-to-date profit and loss statement. There are now stated income programs available.
Divorced
You may be a divorcee who is self-employed or an employee. You may make enough money that you can qualify for a loan all by yourself as an employee or self-employed business person. In addition to the documents above, you would need a divorce agreement, which should stipulate alimony and child support payments.
Older Borrowers (Over Age 62)
There’s no differentiation in terms of the documentation needed for qualifying for a mortgage, but if you are over 62 it allows you to take advantage of the general mortgage programs in addition to the government-insured program called a reverse mortgage.
Investor
Typically if you’re an investor that would put you in the self-employed category and you would require the documentation as mentioned above in addition to leases on any other property that you’ve owned.
Life Event Affecting Credit
If you have experienced hardship, foreclosure, a deed in lieu scenario or a chapter 11 or 13 bankruptcy, you may need to have a great letter of explanation along with supporting documentation as to the reasons for the occurrence causing a decline in credit score. Some programs have waiting periods from the event, but on the bright side, there are programs called fresh start that would eliminate waiting periods that other loan programs require.
Foreign National
In the last couple of years, many foreigners have used their wealth to buy high-end residential real estate located in the U.S. The two obvious reasons are:
- US real estate is considered a safe haven, and
- They had an advantageous dollar exchange rate.
In general, obtaining a loan for a foreign national (FN), non-permanent resident alien (NPRA) or permanent resident alien (PRA) is not much different than getting a loan for a U.S. citizen, in that financial documentation for income, credit and assets is still required. Underwriting may be slightly different.
The classifications are as follows:
FN: The borrower has no green card and no visa, or has income from foreign sources.
NPRA: The borrower lives and works in the U.S. and is here on a visa (of which there are many different types and must be unexpired and valid for at least six months). Does not have a green card. Must have U.S. employment contract and social security card.
PRA: The borrower lives and works in the U.S. and has a green card. Usually must have two years US income/tax returns.
Do you know who you are? Now, you have a head start.
By Carl Edward Guzman
Carl Guzman, NMLS# 65291, CPA, is the founder and president of Greenback Capital Mortgage Corp. a Zillow 5-star lender. Visit http://www.zillow.com/profile/Greenback-Capital/Reviews/?my=y. He is a residential and reverse mortgage financing expert and a deal maker with over 26 years’ industry experience. Carl and his team will help you get the best mortgage financing for your situation and his advice will save you thousands! For more information, visit www.greenbackcapital.com.
