This BLOG On Documents Required For Mortgage Loan Processing Was UPDATED On December 11th, 2018
Applying for a mortgage loan is a process.
- The first step is to complete a full mortgage application which is known as 1003
- It is a 4 page application that asks personal and financial information on borrowers and co-borrowers
Mortgage loan applicants need to state all of the personal and financial information:
- This includes income, assets, and liabilities for borrowers and co-borrowers
- 1003 can be completed online or loan officer can take it over the phone
- Once 1003 is fully complete, the loan officer will pull a tri-merger credit report
- The loan officer will thoroughly review credit scores and credit report
The completed mortgage application along with the credit report will be submitted to Fannie Mae’s automated underwriting system:
- AUS is also known as DU AUS or Freddie Mac LP Loan Prospector
In this article, we will cover and discuss the proper documents required to start processing and underwriting a mortgage application.
Automated Underwriting System/ Documents Required For Mortgage Processing
Mortgage borrowers will want to get an approve eligible from the automated underwriting system.
- Mortgage Lenders who have no lender overlays will just go off AUS Findings
- However, if lenders have overlays, the loan officer needs to also check what their lender overlays are beside the AUS
- A loan officer issues pre-approval letter once he or she is confident that the borrower meets all mortgage guidelines and overlays
Once home buyers decide on a home purchase, they submit an offer:
- Once both buyers and sellers agree on a price and terms, the executed real estate purchase contract is submitted to the loan officer
Documents Required For Mortgage Loan Processing To Submit To Underwriting
Once the loan officer has the signed real estate purchase contract the mortgage process officially starts..
- Loan Officer will mail or email borrowers mortgage disclosures and Loan Estimate
- Loan Officer or Mortgage Processor will email a list of docs required
Importance Of Gather Documents
Most mortgage lenders will require the basic same documents. Documents required for mortgage loan processing vary from lender to lender but most of them require the basic following information.
- The real estate purchase contract
- Copies of social security cards for both the borrower and co-borrower
- Home address for the past two years
- Two months of bank statements which include any and all checking and savings accounts, money market accounts, retirement accounts, securities accounts, and other liquid accounts
- Most recent paycheck stubs
- 2 years W-2’s
- 2 years of tax returns
- other proof of income such as social security statements, pension award letters, etc.
- Proof of other income such as child support, alimony, etc.
- Bankruptcy documents if applicable, divorce decree if applicable
- Canceled checks to determine rent verification
- Gift letters in the event if you are receiving a gift for the down payment from a family letter
- Explanation letters for a recent credit inquiry, prior bankruptcy, prior bad debt, or prior judgments/collections
- Be prepared to explain extraordinary deposits and/or withdrawals