Kieber: Are you lender ready?
If you are shopping for a new home or looking to refinance the mortgage you currently have are you ready to meet with your lender? Have you gathered past federal tax documents? Do you have your bank statements readily available?
If you are like most potential borrowers I will bet you have thought it is time to get financing but put together none of the financial documents needed to start the process.
Put yourself in my position. Maybe I know you as a neighbor, a friend of a friend or you are new to the area. If you were me, would you lend money to someone that you know just in passing? I bet not.
So here is a step-by-step guide on what documents you need to gather for your meeting with your mortgage lender.
The first document that we will want to review is your past two years of federal taxes. Make sure to have all the pages that were filed with the Internal Revenue Service. The most common tax forms are titled 1040 form. The reason we want to see these documents is to know what your gross income was for each of the past two years. Was the income rising or was it declining? Did you sell an asset that bumped your income one time but will not reoccur in the future? These documents are a very important part of the review process.
Then make sure that if you receive a pension or Social Security that you provide a copy of the Annual Award letter. Each year the Social Security Administration sends out letters detailing the financial amount that will be sent to you as the recipient. These letters and your W-2 forms supplied by your employers are definitely needed for the review.
If you are self-employed you will also need to supply your 1120 federal tax forms. All the pages filed with the IRS are needed plus any K-1s and 1099s are needed, too.
The next items you will need to provide are your most recent two months of pay stubs. These will document your wages for the pay period but also show us the amount received so far this year. We use this to determine annual income and if you have received a wage increase since the end of last year.
Next will be the most recent two bank statements. Once again we need to see all pages, even if one page states it is intentionally left blank, we need to see that too. The reason for this is simple. We need to document balances, see if there were any unusual deposits, and to document that you have the funds to cover the reserve requirements. Your lender will explain the reserve requirements as they differ based on the type of mortgage you apply for.
Finally, bring along any additional paperwork such as a divorce decree, bankruptcy documents and trust papers. These all will be required so have them ready right up front.
By having all these documents ready for review the first time you meet with your lender the process starts off on a good note. Your lender will appreciate your work in providing these documents and it will help in getting the new mortgage process off on a great note!
Robert (Bob) Kieber is a longtime resident of the Summit County and has been closing mortgages for more than 20 years in Colorado and nationwide. If you have a question Bob can be contacted at 970-485-1312 or email him at rkieber@boeMortgage.com.
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