Home Loan Guidance Topics

Collect Necessary Documents Early
Keep Them in Good Order


Easier deals are cheaper deals for lots of reasons. Make your deal go as smoothly as possible and you will get better rates, save time, and have less hassles. That's an overriding broad tip that can help you dramatically. Regardless of what the information age has brought us, lending is still heavily dominated by paperwork and paper trails, so if you want the process to go smooth, you've got to master the paper chase!

You'll need all the time you can muster to focus on getting the best deal possible for you. If you are scrambling around looking for paystubs and legal judgments at the last minute, you will be eating up valuable time. If your papers are organized well, it will be easy for you to get up from one mortgage loan source and move to another to get a second or third quote.

So, knowing that the home loan process is a very paperwork intensive one, what paperwork can you keep in good order that will smooth the loan process?

• Income verification. Tax returns and associated paperwork, W-2s, Paystubs, Proof of bonus checks, or monthly commissions checks, as examples
• Business income verification. If you are self-employed or own a significant percentage of the company, you may need company financial statements, business tax returns, and other documents
• Financial asset verification. Cash in bank accounts is best, so several bank and institution statements (at least your most recent 6 months to be safe), savings accounts, CDs, money markets, stocks, bonds, IRAs mutual funds, even cash value of life insurance policies
• Non-financial asset verification. You may not have a lot in the bank, but if you can show that you bought two cars, and paid the loans on time or ahead of schedule, and the vehicles are free of debt and clearly in your possession, that says a lot
• If you own any other real estate, that would of course help
• Credit profile supplemental information such as letters proving that you have paid down certain balances
• Honest accounting of all of your debts, proof of rent payments, any other obligations
• Anything else that speaks to your cash flows, savings, assets, and credit-worthiness
• Paperwork regarding your potential new home (particularly condos, new construction, etc.)

Gather your information early and file them in a folder system you're comfortable with and will use. This does not have to take a lot of time. Every month, simply file all of your paperwork in a different folder for each category. Make sure you keep the filing up to date. Keep it all in a crate or a giant folder. Portability is key, allowing you to walk your information out of one mortgage source's office and right into another's to get another quote.

Make the presentation of your documentation efficient and organized. Remember, there is a behavioral factor to getting a cheaper loan. If a mortgage source thinks she is going to have to spend hours and hours everyday babysitting your deal and sifting through disorganized paperwork and faxes, she may price your deal higher to account for this time. They absolutely have the ability to charge you more for your loan in many different ways, and you may never even realize it.

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