Use this firsttuesday FARM Letter in your marketing. For a list of all our FARM letter templates and copy, visit our FARM Letter page. Have a topic you’d like us to write about?
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Applying for a mortgage?
Prepare to impress the lenders
Documentation you provide each mortgage loan originator (MLO) you apply to for a mortgage includes:
- Proof of income: Your two most recent payroll check stubs or electronic deposit receipts showing year-to-date earnings. Also, copies of the last three months’ bank statements.
- Tax returns: Copies of your W-2s (or 1099s) and tax returns for the past two years.
- Payment history: Provide checks showing 12 months of rental payments to your landlord.
- Bankruptcy history: Copies of bankruptcy discharge papers, including a list of creditors and a written explanation for your bankruptcy petition.
Common triggers that increase lender scrutiny are:
- Large bank deposits: Lenders confirm funds deposited in your bank account come from bona fide sources, such as wages or inheritance. Deposits substantially larger than a regular paycheck require an explanation about the source.
- The location and type of home under consideration: Lenders match the distance to your work and the size of your family with the location and size of the property. For a mortgage, the lender wants to ensure you occupy the home — not leasing or flipping it. If you work from home, provide verification from your employer.
- Undisclosed debts: Avoid making large purchases in the three months prior to and during your loan application process. A new payment may change your credit rating and adversely affect your getting a mortgage.
- Income inconsistency: Document any changes to income, such as transitioning from 1099 to W-2 employment. Earning more than the average person in your occupation triggers further concern.
Call me and set up an appointment to talk through the steps today!
