Should I Be Concerned About A Light Documentation Loan Offer?

Absolutely yes, here’s why… On January 10, 2014, qualified mortgages took shape for the entire mortgage industry mandating lenders specifically document of borrowers ability to repay. Because of of these new regulations, if you receive a mortgage quote offering less the normal documentation such as not needing a pay stub for example if you are a W-2 wager, or only needing one year of income tax returns among others, this should raise questions.

The first question you would want to ask yourself is how is this lender able to do something that others cannot? Mortgage lenders don’t have a monopoly on the market all mortgage money comes from the same place with the exception of folio lenders which are usually local banks and credit unions who have niche products but still have ability to repay requirements which still requires full income documentation.

Following is the traditional list at the minimum, approved lender would request of you when determining whether or not to approve you for a mortgage.

→Two years of tax returns
→Two years of W-2’s
→Thirty-day pay stubs
→Sixty-day bank statements

Additionally, during the loan qualification process it is essential to let the mortgage lender run your credit report. There’s no way for them to issue a credit decision without a credit report in the name of the lender whom you are applying with. Credit reports are not transferable amongst lenders.

Beginning The Loan Process

Put together the financials, apply with a lender, allow to obtain your credit report. Doing this will allow you to accomplish your main objective which is to determine whether or not the figures are affordable in alignment with your goals and expectations.

Need a mortgage? Start by receiving a fast mortgage rate quote to purchase or refinance a home, it’s free!


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