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This blog post was originally converted from an article that I wrote during the time when I owned a mortgage bank. Your ability to borrow money is the single most important factor whether you plan to buy a home on the Eastside or anywhere else in WA. These requirements have not changed significantly, thus I am reposting it. I recently wrote a book to help homebuyers streamline the entire process. It contains a chapter on this very topic. Check it out.

The paperwork that is involved in the process of making a new application for a mortgage loan overwhelms most borrowers. A good Mortgage Broker must take steps to make this part of the loan application simple and easy to manage for the borrowers when they buy a home. It will improve the rate of loan closures and is so easy to do. Mortgage Brokers can do this simply by being well organized and by assisting their client’s step by step in the early stages.

First, let us understand a basic principle. Lenders require that every piece of the information that will influence their decision-making process must be documented through legitimate paperwork. In other words, if the borrower says that she makes $120,000.00 a year, she must be able to properly document it. When a borrower states that he or she has $75,000.00 as a down payment, he/she must be able to demonstrate through proper documentation that this money is in fact his/her own funds.

Minimum requirements:

These have been established for such documentation to ensure that the information is accurate. These requirements are also designed to eliminate misconduct. Borrowers can simplify the process and reduce their own stress by providing the following:

• Full Name(s), Date(s) of Birth, and SSN(s) in the US or SIN(s) in Canada.
• Photocopies of IDs.
• Residential Address(s) for the past 5 years.
• Employment History for the past 3 years.
• Employment Letter from HR or a Supervisor, to include start date, position, salary, full or part-time, etc.
• Documentation to support income such as the 3 most recent pay stubs
• Additional proof of income such as W-2s and 1040 Tax Returns in the U.S. or T4s, Tax Returns or Notices of Assessment, etc. in Canada. It’s standard to provide proof for the past 2 years (3 years if self-employed).
• A complete list of ALL assets and supporting documents – for the last 3 months. Any unusual influx of cash must be explained in writing.
• A complete list of ALL liabilities.
• Specifics of your current mortgage (if Refinancing) Usually the most recent statement from the current lender will suffice.
• Documentation to explain and support any unique situation that may exist.
• MLS listing page and a copy of the Purchase & Sale Agreement.

A prudent Mortgage Broker will assist his or her clients with compiling this information as early in the process as possible. This lays the groundwork for smooth and timely closings – something which their Realtor partners will thank them for by sending more mortgage clients their way. That’s a smart sales strategy.