This Article Is About Verification Of Mortgage Guidelines And Requirements By Lenders
A Verification of Mortgage, also referred to as VOM, is mortgage documentation of the borrower’s overall mortgage payment history. Verification of Mortgage on a prior mortgage payment history is important for lenders who are reviewing a borrower’s new mortgage loan application request. All lenders want to see borrowers’ past housing payment history. For a homebuyer who recently sold their home and applying for a new mortgage, the lender of the new mortgage wants to see how timely the loan applicant has been with their prior mortgage payments. Timely payments in the past 12 months on their prior mortgage are necessary for them to be eligible for a new mortgage. This is especially with a strong emphasis in the past 12 months. VOM is required when a mortgage loan applicant applies for a new mortgage. This is whether it is a refinance mortgage or other properties such as a second home, or investment home.
In order to get an approve/eligible per automated underwriting system (AUS) on a new mortgage, a borrower needs to have been timely with their prior mortgage for the past 12 months. You may get an approve/eligible per automated underwriting system with one thirty days late mortgage payments in the past 12 months. However, any late payments on a mortgage in the past 12 to 24 months is a definite negative for borrowers. Thirty-day late payments on mortgage payments are one of the worst derogatory credit tradelines any borrowers can have on their credit report. A VOM will reveal any late mortgage payments in the past 12 to 24 months.
Mortgage Guidelines On Timely Mortgage Payments In The Past Month
Per Verification Of Mortgage Guidelines, the reason verification of mortgage, VOM, is required is because the lender that is processing and underwriting a mortgage loan applicant’s application can verify the following:
- the existing mortgage loan balance
- monthly payment
- payment history for the past 12 months
- and to see if the borrower had any late payments in the past 12 months
Importance Of Verification Of Mortgage
A verification of mortgage is an extremely important document that is required for homeowners who are going through a refinance mortgage. One of the main factors why verification of mortgage is required is it shows the habit of a borrower in paying mortgage payments in the past 12 months. Borrowers who have been timely with making their housing payments in the past 12 to 24 months show financial responsibility to the borrower.
It shows the borrower is capable of paying their monthly mortgage payment timely. Borrowers who have been making their monthly mortgage payments timely in the past 12 months will most likely make future mortgage payments timely. Past performance is a good indicator for future performance.
Why Do Lenders Want Verification Of Mortgage
Most folks who apply for a refinance mortgage need to provide verification of mortgage to the lender who is processing and underwriting their new mortgage loan. A verification of mortgage form is normally provided to the existing mortgage company. A lender who the borrower currently has their current mortgage loan with needs to verify that borrower has been timely with their mortgage payment.
The mortgage company borrower has a loan with will verify that borrower has been timely with their payments for the past 12 months. New mortgage company borrower is applying for their new mortgage loan needs VOM with timely payments in past 12 months. One of the key questions that the current mortgage lender needs to check is the question where it asks if the mortgage loan applicant has been making timely payments for the past 12 months. You cannot have been late in the past 12 months on your mortgage payments to qualify for a new mortgage loan. One time 30 days late payment on mortgage payment may be allowed by certain lenders. The majority of lenders will not allow any 30 days late payments in the past 12 months.
Verification On Non-Traditional Home Purchase
If you purchased your home via seller financing and/or had other non-traditional financings to purchase your home and are now refinancing your mortgage loan, verification of mortgage will still be required. 12 months canceled checks which were paid to the mortgage note holder or hard money lender will need to be provided. No late payments in the past 12 months will be required. The only way to provide verification of mortgage is by providing 12 months of canceled checks.
Cash payments do not count even though the mortgage loan note holder provides a paid receipt. If you have been making your housing payment with cash some months and checks other months, that will not count as verification of mortgage and you would need to have to wait until you have 12 months canceled checks.
This BLOG On Verification Of Mortgage Guidelines And Requirements By Lenders Was UPDATED On September 18th, 2021.
Related> Verification of Mortgage
Related> How to request verification of mortgage
Related> Documents requested by mortgage lenders
My husband is a disabled veteran who was medically separated from the Army in 2014. He tried to work a couple of jobs during that time and in 2018 we realized that he cannot work anymore. He got his permanent and total in August 2019(dated for February 2019) and we filed for bankruptcy December 2019. It was discharged May 1, 2020. I have had stable employment since and he gets 100% VA disability with home bound extra pay.
I have two questions about this: Does this qualify as an extenuating circumstance? And if so, if we would like to buy new construction that will take 7-8 months to complete can we go ahead and sign a contract now?
Thanks in advance.