What Documents Are Needed When Applying For A New Jersey Mortgage?
Lending guidelines sure have gotten tougher over the past year. Lenders are requiring more and more documentation than ever before! As a result, we at First Lenders Mortgage thought it would be a good idea to provide an “UPDATED” list of what is required by banks today when applying for a mortgage! And YES! You most likely DID NOT have to provide some of these the last time you applied for a loan. Keep in mind, these are Fannie Mae and Freddie Mac guidelines and apply to all lenders!
WOW! New Jersey Mortgage
We strive to submit loans with the LEAST amount of conditions and as a result, we continually close our loans WITHIN 30 days!
1. Last 2 Years W2’s.. If you had multiple employers in the previous years, or received additional income, please provide ALL W2’s for that year. You MUST Provide ALL W2's,1099's, etc filed for BOTH Borrowers. All that were filed to IRS for both husband and wife.
2. Last 2 Years Personal Federal Tax returns (All Schedules) Keep in mind, other conditions sometimes arise if there is "other income", rental properties, certain losses, etc being reported. The numbers on your tax returns MUST match exactly to your 4506 tax transcripts that the lenders always order from the IRS. Any differences must be explained and documented. ONLY FEDERAL... NOTE STATE
NOTE: If you filed any K1's, 1065's or 1099's, Schedule C, on your returns, we will need as well
3. If Bank statements are required, please provide ALL pages (THIS IS IMPORTANT), a lot of people will simply turn in the front page of the statement but the banks require ALL pages even if “page 3 of 4” is a blank page, still gotta have it :) Statements MUST be recent within last 30 days!
IMPORTANT: Lenders DO NOT accept internet printouts if it does not show your full name, address, and full account number on it
4. Also keep in mind if any LARGE deposits (usually $1,000 and more) or withdrawls are on the bank/asset statements, they will have to be explained and documentation provided. Also if you are planning on "transferring" monies from one account to another to "pay for certain closing costs or for your escrows" in the form of a cashier's or certified check, BOTH statements will need to be provided to the lender.
5. Copies of ONE months most recent paystubs ( if you have commissions,bonuses,any inconsistent income, or you are a teacher, a work verification of employment will need to be completed by your employer.)
6. Copy of Mortgage Statement (ALL Properties) keep in mind, the "balance" that shows on a current mortgage statement is NOT what your loan payoff is when we call for a loan payoff during a refinance. There is TRAILING interest on a mortgage so the loan payoff is ALWAYS higher than what shows on a current mortgage statement. So you have to factor this in when trying to figure out what your NEW loan amount is going to be when we factor in standard closing costs AND establishing NEW escrows for taxes and insurance ( if you choose to escrow with the new loan ).
7. Homeowners Insurance Declaration Page (ALL Properties) KEEP in Mind, if your homeowners "renewal" is within 30 days when your FIRST mortgage payment is due ( NOT the month you close), the lender will REQUIRE that year's policy renewal premium to be paid in full with the new loan. This also has to be factored in to the NEW loan amount as well.
NOTE: If your property is in a Flood Zone, we will need the Flood Insurance Declaration Page as well
8. Copies of Drivers Licenses
9. NEW… If you have any American Express credit cards or any other “open” style accounts. Those credit card statements will need to be provided. REASON.. Since the credit reports do not show a minimum payment, the banks will ask to see the statement so they can calculate the minimum payment in to your debt to income ratios to qualify!
IMPORTANT: If the American Express statement DOES NOT show a minimum payment, then either the balance has to be paid off at closing OR you must provide sufficient assets ( Bank statement with liquid funds) to show the underwriter that you do have the ability to pay the balance in full!
10. NEW… If you have any CREDIT INQUIRIES showing on your credit report, a specific letter of explanation will need to be provided for EACH one… REASON.. Lenders will want to make sure you are not over extending yourself credit wise or looking to open new “debt” when in the middle of applying for a mortgage. If there are any NEW accounts opened as a result of the credit inquiry, that current statement(s) will also need to be provided to show minimum payment for debt to income ratio calculation.
11. If you have a Home Equity line of credit that is either being PAID OFF or Subordinated, a copy of the “note” will be needed to confirm there is NO pre-payment penalty or if terms are acceptable. Usually if you had the HELOC for more than 3 years you are good to go!
PLEASE NOTE: If your "Total Credit Line" on your home equity loan has been DECREASED/LOWERED in the past, that must be mentioned at the time of application
12. If you are currently NOT escrowing for Taxes and Insurance, you will need to provide a current property tax bill so the lender can calculate those into your debt to income ratios to qualify!
13. If you are taking CASH OUT (refinance) of more than $10,000, a cash out letter stating what those funds will be used for will be required..
IF YOU OWN INVESTMENT PROPERTIES OR A SECOND HOME PROVIDE THE FOLLOWING:
- MUST show on tax returns (if applicable)
- Copy of mortgage statement on all properties if you escrow for taxes and insurance. If you do not escrow, provide the most recent tax and hazard bills for each property. If a condo, need proof of maintenance fee
- Provide sufficient RESERVES (Asset/Bank Statements, ALL Pages)
IF YOU ARE SELF-EMPLOYED, THE FOLLOWING MUST BE PROVIDED:
- Copies of last 2 years Tax Returns (All Schedules) including any K1’s, 1120’s, and 1065’s (if applicable)
- Copy of corporate/business returns for most recent 2 year period if owning 25% or more of company
- Minimum of 3 months reserves will be needed. If using business assets, 6 months will be required.
- Provide one of the following to verify the existence of the borrower’s business:
B) Business listing or yellow page ad;
C) Business License; or
D) Internet printout
(e.g. business website, government, union or professional website).
PLEASE NOTE: You only need to provide the documentation that applies to your particular income and asset situation
- NOTE: NO WORK ON THE PROPERTY CAN CURRENTLY BE TAKEN PLACE!