Securing mortgage loan financing requires a laundry list of paperwork. Here’s a really simple tip you can take to the bank to make sure your process is easy while getting the best mortgage…
Every year you gather together paperwork for doing your tax returns things like; receipts, explanations, paystubs and W-2s. 70% of this information is the same things you’ll need for getting a mortgage loan. Let’s say you do your taxes on time in April without saving your documents in a secure easy to find location. Later on in October you decide you want to apply for a home loan only to soon realize you now need to compile the supporting documentation.
On your computer, a thumb drive or in a file sharing service make a folder that says mortgage documentation. Within that folder make a list of some folders that have the following titles:
- Tax returns-include personal returns and corporate returns all pages and schedules. Mortgage tip: Have your accountant send this to you via secure PDF email then simply drag and drop into the folder for future use.
- W-2s– same concept, you’ll need the most recent last two years
- Pay stubs-every time you get paid simply download the pay-stub in PDF format and drag and drop it into the folder. It takes literally a minute and can save you a ton of time in the future.
- Bank statements– every month when you pay bills simply download your bank statements in PDF format and once again drag and drop them into the appropriately titled folder.
Doing the above things does create a bit more work on an ongoing basis, but it insures you are prepared. While these simple tips will help you obtain a mortgage, this documentation planning goes further. Any other form of credit usually contains the same needed financial documentation. Including, but not limited to:
- car loans
- student loans
- personal loans
- home equity lines of credit
- credit cards
- any credit offers
Documentation planning will make the process of obtaining credit faster as supporting documentation is literally at your finger tips. This way when you apply for a loan and order an appraisal and you lock in an interest rate, you’re not scrambling to put together your financials inevitably stressing yourself out because you can’t find a paystub or a W-2 from two years ago. Save yourself from the need to go “digging” and if applicable to your financial picture, these things will come up:
- Previous divorce– have the divorce decree including all pages, all schedules including the schedule of creditors in the saved
- Previous foreclosure – have the trustee’s sale date deed saved
- Short sale– have the final settlement statement from that transaction saved in the appropriate folder
- Alimony or child support-have the agreement paperwork saved
- Tax debt– have state and/or federal payment plan saved
Requests for documentation referenced in this article are consistent with today’s mortgage lending world. Be smart, be prepared and make sure you have the documentation ready before the lender asks for it.
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