Seattle Real Estate:

I try to keep track of the searches people type into search engines to end up at our site.  From time to time, someone ends up visiting based on a question or certain search term that we touch on, but don’t necessarily cover in depth.  Recently, I noticed a new one that falls under that category.  It was,

“How many times do I have to send my loan officer documents?”

That’s a great question.  Though I, of course, don’t know the circumstances…the first time I read that,  I could just envision some poor frustrated soul pounding it out the question on their keyboard after their loan officer asked them - AGAIN - for more documentation!

So how many times do you have to send your loan officer documents to get a mortgage?  The answer is…it depends.

Here is how it seems to typically work.  Most of the time, people seem to find a loan officer by referral.  There’s usually a brief consultation over the phone or by email that results in a pre-qualification.  To get a full blown pre-approval, the loan officer will pull your credit and ask you a series of questions.  Based on the answers to those questions and considering your credit score, the loan officer has a pretty good idea of what you can afford and for what programs you’ll qualify.  Sometimes you’ll even get put through an Automated Underwriting System (AUS).

At some point, you’ll have to make a formal application for your mortgage and it is usually at that point where your loan officer will ask you for a list of documents that help them substantiate the information you have already provided to them.  Those documents typically include:

• Consecutive pay stubs covering the last 30 days (five if paid weekly, three if paid every two weeks, two if paid twice a month, one if paid monthly).
• W-2s for the last two years.
• If you are self-employed: Copies of corporate, partnership or S-Corporation Federal Income Tax Returns with all schedules and K-1s for the last two years.
• Complete statements (all pages) for the last two months for all checking, savings, CD, money market, stocks, bonds, IRAs, 401Ks or other bank and investment accounts.
• Copy of sales contract on house you are purchasing.
• If applicable: Names, addresses and telephone numbers of your landlords for each residence you rented over the last two years.
• If applicable: Complete copies of divorce decrees and associated amendments to support alimony and child support payments.
• If applicable: Complete bankruptcy papers, including filings and discharges.
• For recent graduates (in last two years): Copies of transcripts or diploma showing the date of graduation.
• VA buyers: DD-214 and Certificate of Eligibility

Your loan officer then takes those documents and gives them to his or her loan processor.  The processor takes your application, bundles them with the documents you’ve provided, and makes any verification of employment calls, etc.  That package is sent to the underwriting department who reviews the package and makes sure that the provided information is a match for the loan program you have selected.  Once your file is approved by underwriting, it is sent to the closing department who generates the loan package, which is the bundle of paperwork sent to the escrow company for you to sign in addition to the real estate transfer documents.

You might be asked to supply more documentation when:

• The processor receives your documents from the loan officer and reviews them, if he/she has forgotten to obtain something from you or if your specific loan program requires some sort of paperwork that is outside of the norm.
• The underwriter determines that more documentation is necessary to substantiate a claim that you have made.  For example, you might have disclosed that you obtain a certain portion of your income in a bonus.  The underwriter may request a letter from your HR department in addition to a pay stub that shows the bonus.
• If the loan program documentation requirements change, as they sometimes seem to do, before your loan is finalized.
• At anytime if someone forgets to ask for something previously, or if documents provided bring up more questions.

The process can be frustrating, and frankly feel pretty invasive, but it goes with the territory if you want to get a mortgage loan.  You can help speed the process along by selecting a good loan officer, and providing all requested documents as promptly as possible.

Any questions?  Interested in a referral to a good loan officer?  Just ask - 425.677.5000 or email us.

This entry was posted on Sunday, November 23rd, 2008 at 7:23 pm and is filed under Buyers, Mortgage, Q&A. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.