Document, Document, Document
It is impossible to overstate the importance of documentation when trying to get a mortgage. In today’s economic climate, lenders want to know where your money is coming from (i.e. income), where it is going (i.e. debts), and how much you have (i.e. assets). The way we prove the answers to these questions, is through documentation.
- To verify income, the borrower is typically required to provide recent pay stubs, W-2’s, 1099’s, and tax returns. If the borrower has other forms of income, such as dividends or social security, there may be additional documents required.
- Debts are typically discovered through a credit report. Often to verify these debts, the borrower may be asked to provide letters of explanation. While these letters may seem excessive, there are many situations where the underwriter needs to know why something is occurring.
- Documentation of assets can be quite easy to provide. The type of documents typically required include bank and retirement account statements. Many of the documents can be found online through the financial institution’s website.
To ease the strain and stress, make sure that you have the necessary documentation available when you decide to move forward with the home buying or refinance process. Also, be prepared to provide additional documentation in a timely manner if required by the lender.
Home Plus Down Payment Assistance Changes
The Home Plus income limits will increase to $105,291 on all mortgage types: FHA, Freddie Mac Advantage for HFA, VA, USDA and including Fannie HFA Preferred. Fannie Mae has pivoted from their previous hard stop income limit of $69,100 within Maricopa County & $66,200 for the balance of State, to now establishing those income limits to be thresholds. Fannie will allow HFA transactions in Arizona over these income thresholds with an increased G Fee, which equates to a slightly higher interest rate than Fannie HFA transactions below the income thresholds. The home plus purchase price limit will also be eliminated.
- Don’t open new debts while in contract
- Don’t quit your job
- Don’t deposit substantial amounts of cash into your bank account.
- Disclose all debts
Have a great month and let me know if you have any specific questions pertaining to your own personal situation.
By Andrew Augustyniak, Branch Manager Prime Lending