common Question During the Mortgage process

Thank you for applying with our company for a new home loan! In an effort to be transparent about the current guidelines and what lenders are looking for on your loan, we have tried to answer some of the questions you may have now or during the process. Please see below for our Frequently Asked Questions and also note that all of this may or may not apply to your loan:

Question: I was asked to provide bank statements what should I provide and what should I be looking for?

Answer: Please be advised that ALL lenders are looking for the same things on your bank statements. If there are 5 pages to your bank statement, we need all 5 pages even if the last one was left intentionally blank or has copies of checks. There can be no alterations to the documents such as “blacking out” sections or account information. The statement must list the account number, name of the bank and name of who is on the account(s). The underwriters are also looking for large (non payroll) deposits. Due to money laundering laws, every bank will want borrowers to document any large deposits as well as a letter of explanation for each instance. The general rule is that any deposits (collectively) on a statement that add up to 50% or more of the borrower’s monthly income must be documented and explained. Documentation is usually a copy of the check or deposit slip as well as the letter of explanation. Please consult your loan officer for clarification if you need it. Please always send the 2 most recent bank statements.

Question: I was asked for a copy of my tax returns. Do I send just the first two pages of my 1040 for last year?

Answer: No. While some lenders will only require 1 year of tax returns, please consult your loan officer to see if you need the previous 2 years. Also, please make sure to send your complete tax returns, including all schedules, every page. The underwriters can and will verify what was submitted to the IRS and if there is anything reporting to Schedule C or the 2106 for example, they will need to see those schedules to add or subtract income when they complete the debt to income portion of your loan. Please make sure you send the complete returns if requested.

Question: My ID is expired; can I just send that to you?

Answer: For submission of your loan and to get you started yes. But please know we will need a copy of a valid non expired Drivers License or other form of photo ID during the process of your loan due to current patriot act laws. Identity theft is a big concern and we want to make sure the lender receives everything they need in a timely manner as to not delay your loan closing. If your Drivers License has been extended, please make sure to send us a copy of the back side of the ID.

Question: My loan officer asked me for a copy of the NOTE on my mortgage. What is this and where do I find it?

Answer: The NOTE is a necessary document in many refinance transactions. If this was requested you should be able to obtain a copy of it from your current loans closing package that you should still have. It is a 2 to 5 page document that clearly states “NOTE” at the top of it and lists the loan amount, interest rate and when your payments start and end. If for any reason you don’t have this in your closing package or can’t find it, you can call your current lender and request a copy of it to be sent to you or to make it even easier, you can request it to be faxed to your loan officer’s attention at 630-904-1010.

Question: I have a second mortgage or Home Equity Line of Credit; does this affect my current loan in process?

Answer: Yes! We will need to obtain a copy of the NOTE (for the second mortgage) or Credit Line Agreement (HELOC’s) as all lenders require this. If you have a second mortgage/HELOC, make sure to bring it to your loan officer’s attention immediately. In the event you have a second lien as mentioned above, we need to do a subordination. Subordination is the process in which your second lender will agree to the new first mortgage you are applying for and re-take second position on your home. Unless you close this second lien out or pay it off, subordination is necessary.

Question: I don’t understand my Good Faith Estimate or other documents included in my application. What should I do?

Answer: Due to the federal government’s rules pertaining to retail and wholesale lending institutions, Good Faith Estimates and other documents have a potential to be slightly different from one company to another. If you have any questions whatsoever as to what is on these documents call your loan officer immediately! They will explain in detail every fee and what it is for. They will also make any correction and/or changes as necessary.

Question: I am buying a home and not refinancing. What documents do I need on top of what else was asked for?

Answer: Besides the “regular documentation” (i.e. W2’s, paystubs, tax returns, bank statements, ID’s, etc.) we will also need a copy of the fully executed purchase contract, copy of the earnest money check and name and number of the home owners insurance agent you intend on using.

Question: I have to bring money to closing. Who do I pay and what kind of check do I need?

Answer: If you have to bring money to closing, the check should always be payable to the title company on the loan. Call your loan officer for this information or refer to the settlement statement which will list the company’s information on it. Any funds due can be by personal check if they are under $1,000.00 however it is always best practice to use a cashier’s check as to fund your loan in a timely manner. If this applies to you and you are going to do the personal or cashier’s check, please make sure the check is from the account you provided to the lender when they verified your assets. If you are to bring more than $1,000.00 to closing but less than $50,000.00, it must be in the form cashier’s check with no exceptions as well as from the account we verified. If the amount is greater than $50,000.00 it must be wired to the title company the day before closing due to the Good Funds Act. Please ask your loan officer for the wiring information.

 Question: I own other homes but they are owned “free and clear”. Do I need to disclose this to my loan officer?

Answer: Yes!! All properties that a borrower owns must be disclosed on the application under the section “real estate owned”. If for any reason this was not discussed with your loan officer, please make sure to fill this information out at the bottom of page three of the application and provide the loan officer with the home owner’s insurance agent information (name and phone number). We may need additional documentation so please contact your loan officer immediately.

Question: I was asked for my social security card. I can’t find a copy of it anywhere. What should I do?

Answer: When doing a government loan (FHA/VA) this is usually required for all borrowers. Feel free to complete the application and send everything else in, but you will need to apply for another card. The social security administration process usually takes about two weeks. If you do it right away, we will have the card by the time we need to close.

Question: Is my rate locked and how soon can I lock my rate in?

Answer: Most applications do not have a rate locked in as we usually require a signed application back in our office before we can upload the loan to the lender and lock the rate in. Certain exceptions may apply and you need to contact your loan officer if you in fact want to lock in. They may be able to help you get the application back to us sooner to help facilitate your lock. While we understand you may be busy, it is imperative you get the application back to us as soon as possible to get the best rate possible.

Question: My loan officer isn’t available, who do I call?

Answer: Each loan officer has a processor working on your file. Please feel free to call in and ask for the processor on your loan if you need help or have questions. If there is something that they are not able to help you with, you can also ask to speak to a Manager as well. 

Thank you for taking the time to read this. By knowing exactly what is required to process your loan, it is our hope that your application has the proper documentation to get you to closing as fast as possible.

As a company we thank you for choosing to work with us and appreciate any referrals we receive from your friends and family. 

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