What You Must Have to Apply for a Mortgage

One of the best things that you can do when you apply for a mortgage is to, as the Boy Scouts say, be prepared.

With all the scrutiny that loan files undergo these days, the better documentation you can provide up front to your lender, the more smoothly the process will go.

Nothing slows the mortgage process more than underwriters having to spend two or three days asking for and then reviewing items that should have been asked for or that were asked for at application but you never provided.

Following are some documents you need to keep your mortgage application on track:

Income:

Thirty days of pay stubs and two years of federal tax returns are pretty much standard.

Contact information for employers over the previous two years is also important, especially if you have had multiple employers.

Each one has to be contacted in the verification process, and the easier you can make it for the lender, the better.

Assets:

The last two months of bank statements are standard.

If you are showing either large deposits or withdrawals on the statements that you submit, be prepared to fully document these items, as lenders will want some type of paper trail as well.

Other Information:

Information like the past two years of residency is important, especially if you have lived in multiple places.

This means you’ll need the names and phone numbers of landlords and/or homeowner associations.

As with income, the easier you can make it for the lender, the more easily the file will move.

The name and contact information of your real estate agent (in the case of a purchase), real estate attorney and insurance agent will be invaluable.

Could the Kiddie Condo Program Be for You?

Now that the school year is over, it might be time to think about where your children are going to live when they go to college. The Federal Housing Administration (FHA) has a great program that will fit this bill perfectly.

It is called the Kiddie Condo loan program, and it allows parents and their children to be on a mortgage together.

To qualify, the student must be at least 18 years of age so he or she can sign the real estate contract and mortgage application with the parent(s).

There is a minimum of 3.5% down, as with a traditional FHA mortgage. Minimum credit scores vary by lender but will probably be in the range of 640 for both parent and student, and neither can have big items like recent bankruptcies, foreclosures or late payments on their records.

The student can have minimal credit, but what he or she does have must be fairly clean, as in no recent late payments for such things as cars, credit cards or cell phones.

If the student has income, so much the better, but he or she will need to be able to prove that the income will continue while he or she is in school.

If the student does have income he or she can use, both the student and parent together need to be able to qualify for both the property the parent currently owns, if there is any, plus the new one.

To follow this scenario through to an exit strategy, both parties will be on the mortgage until the property is either sold or the student refinances the parent off it.