12 Weeks to Homeownership – Week 4
Submitting Loan Documents
Well, welcome to week 4! I hope your first week of house shopping is going well.
This week, it’s important to finish up any loan documents that your lender might be asking for.
Just when you think that you’ve given them every last document, you may need more! Ever since the housing crash, the lending restrictions and the processes have tightened up to protect the consumer – you.
Now, it’s not personal – it’s the current regulations and hoops we all have to jump through, which are set pretty high.
I encourage you to remember, it’s just the system. You will be better served if you keep a positive attitude and don’t let the process from reaching your goals.
Now, in week one, you should have deposited all of the funds you intend to use for earnest money, down payment, and closing costs. The reason you need to have deposited those funds early is that any deposits over $250 that appear on your bank statement will need a letter of explanation. We refer to this as an “LOE”.
Even if you sold your dining set on Craigslist and deposited that cash, those funds will need to be explained.
In some cases, you may be required to provide proof so it’s a good idea to put a hold on any cash transactions until you close your home – including selling big ticket items like your snow mobile, etc.
Now, to get pre-approved, you will need to provide:
- 2 months of bank statements
- 2 most recent pay stubs
- 2 years of tax returns
- And more
Your lender is going to dig deep into those documents to paint a financial picture for the underwriters who make the final decision on your loan.
Slight irregularities will need to be explained and it’s our job to get into every detail to ensure there is evidence to satisfy any question those folks may have.
It’s the minutia of the process.
Your lender should be calling or emailing you
and your realtor with updates at least weekly.
You’re going to hear strange terms. Terms like “VOE” that means Verification of Employment which is just calling your employer and verifying your work status. This is the type of tidying up the file lenders have to do to be prepared for when you go into contract.
Which brings us to your house hunt! How’s it going?
Listen, if you haven’t found that home yet, keep looking. Keep an open mind and good luck!
We’ll see you on week five and remember, keep good notes, stay positive and have some fun with it!
We’ll continue on next week and remember – our Folsom mortgage team is here to answer any questions you may have! Don’t hesitate to give us a call at (916) 985-3200.