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Chrisman's Corner: Borrowers Need to Remember the Basics

Yes, there has been a lot of news about 97% conventional conforming loans, and about the FHA’s lower insurance premiums later this month. But regardless of the program, JMAC’s brokers know that one of the biggest hindrances in the home buying process for borrowers is the amount of paperwork that is required, often slowing down the application process because the borrower is unaware or unable to obtain the required documentation in a timely manner. 

In order to combat this frequent occurrence, it’s imperative for our brokers and their real estate agent clients to inform their borrowers about the necessary paperwork that is required during any loan transaction. Here is a breakdown of items that veteran brokers provide to their customers. 

First, inform your clients that they will be required to list all of their debts and how much they spend each month, ranging from rent, current mortgage, to current financial obligations (credit cards, car loans, student loans, child support and alimony). Advise your borrowers to retain copies of recent bills so they can accurately report and find this information. Next, inform your clients that they will need to provide sufficient evidence of income from their line of work (if they are using income to qualify for a loan). Let them know that W2s from the last two years, as well as the most recent pay stub showing their income from the last 30 days will be required. 

If your client is using self-employed, sales commissions, disability income or unemployment income to qualify, additional forms are required and may take extra time for the borrower to obtain, so identifying what is needed upfront will save a substantial amount of time. Inform your borrowers that recent asset statements will be necessary and ensure your clients are aware that explanations for large deposits will be needed.  For land and other real estate, deeds and other documentation are necessary to determine the current value.

These days JMAC brokers know that few loans are simple. And this list is by no means comprehensive. But it is a fine start, especially for borrowers who have not obtained a home loan in the last five years.