Documents Required For The Mortgage Process

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In this guide on documents required to start the mortgage process from the borrower and co-borrowers, we will cover the basic stages of the overall mortgage process for our client. One of the key factors to a timely on-time mortgage closing is to make sure that all mortgage documents requested from the mortgage originator and the mortgage team are complete, up to date, with no missing pages, and legible. The mortgage processor’s job is to order verification of employment, order the appraisal, clear conditions from the conditional loan approval, and coordinate the closing with the title company.

The Role of The Mortgage Processor

The mortgage loan processor’s job is to gather documents required for the mortgage processor. The great experienced mortgage processor will not only gather documents required for the mortgage underwriter, but will thoroughly comb every page of each document and fact check it is legible, complete, and labeled. For any item that is ambiguous or can potentially be misconstrued by the mortgage underwriter, the mortgage processor will write a letter of explanation and make the document in question easy to understand for the underwriter.

What Differentiates Between A Good Versus A Great Mortgage Processor

The mortgage processor is responsible for making sure the documents required from the borrowers are complete for the mortgage underwriter. The mortgage underwriter will kick back any files not legible, missing pages, or outdated.

When the mortgage underwriter kicks back the file to the mortgage underwriter, the file gets back in the queue. Being back in the queue can potentially delay the clear to close and the closing date.

What Are The Documents Required To Get Pre-Approved?

Mortgage docs requested by the loan officer and mortgage processor should be complete, with no missing pages, and labeled. Include all blank pages as well. Do not text phone pictures of documents. These are important documents the mortgage processor will gather to package them up orderly and neatly for the mortgage underwriter. Most lenders will ask for either the same or similar documents required for a mortgage like the list below:

• Two years of W2s
• 30 days of paycheck stubs
• Two years of federal income tax returns if self-employed and/or have rental properties
• Copy of driver’s license and social security card
• Sixty days of bank statements or other asset account information
• Purchase real estate contract signed by homebuyer and seller
• If a homeowner is selling a home, needs a copy of the listing real estate agreement and sales contract if it is under contract
• Copy of earnest money check
• If refinancing a home, borrower needs a current up to date mortgage states and homeowner insurance statement
• If the borrower owns rental property, need a rental lease agreement and two years of income tax returns
• If borrowers own rental properties, documents required the income mortgage statement of each property and homeowners insurance
• Bankruptcy paperwork if applicable
• Trustee payment history if applicable
• If receiving trustee payment from the past six months
• Landlord contact information if the borrower is a manual underwriting
• Green card or Work Visa, whichever applies
• 12 months of bank statements if they are bank statement-only mortgage loans for self-employed borrowers
• Either 12 months of personal or business accounts.
• If no green card but has a work visa, provide the documents required to show your status
• Divorce decree if divorced
• If judgments and tax liens, please provide three months’ bank statements showing payments have been made.
• If divorce, provide a divorce decree
• If a veteran for VA loans needs a DD214 or Certificate of  Eligibility
• If on social security, disability, or pension, provide the awards letter verifying your income fist

What Are The Documents Required By Lenders To Get Pre-Approved

Mortgage lenders, from your loan officer, mortgage processor, account manager, closers, and underwriters will ask you for documents and paperwork throughout the mortgage process. Be prepared to be asked for documents required from the time you complete the online mortgage loan application through the day of your closing.

How Does The Mortgage Loan Process Work?

There are two phases of your mortgage loan qualification and approval steps. The first phase is getting you qualified and pre-approved so you can go and shop for homes. The second phase of the mortgage approval process is when you have found the home of your dreams and both the sellers and buyers have an executed real estate purchase contract. Once you have the real estate purchase contract singed by the sellers and buyers, the mortgage loan process officially begins.

How To Get Qualified and Pre-Approved For a Mortgage

To get qualified for a mortgage, you will need to complete an online mortgage loan application (1003). The loan officer will run a tri-merger credit report pull. The loan officer will then take your mortgage loan application and tri-merger credit report and enter the data in either Fannie Mae DU or Freddie Mac LP’s automated underwriting system (AUS).

Getting Automated Underwriting System Approval (AUS)

Within seconds the automated underwriting system will render automated findings of approve/eligible, refer/eligible/ or refer with caution. Approve/eligible means you have been approved by the Desktop Underwriter (DU) or Freddie Mac’s Loan Prospector (LP). Refer/Eligible AUS findings mean the borrower is eligible for a manual underwrite on FHA and VA loans. Refer/caution means the borrower does not qualify.

When Does The Mortgage Underwriter Suspend a File?

If the mortgage underwriter sees the file is not legible, has missing pages, or is jpg. cell phone pictures, the underwriter will kick them back to the mortgage processor. What happens then is the file goes back in line until the next time the mortgage underwriter can get assigned to it. You do not want the underwriter to kick back your file.

What Can Trigger a Suspense or Mortgage Loan Denial?

A neatly organized file that has been labeled with no missing pages and a letter of explanation for potential concerns is underwritten and approved by the mortgage loan underwriter within one to three hours. Files that have missing pages, are not legible, and the underwriter cannot pick heads or tails out of it, then the file can be placed in suspense,  or kicked back to processing with a list of conditions.

How To Avoid Stress During The Mortgage Loan Process

The mortgage process is a true process with no shortcuts. One of the biggest reasons why mortgage loan closings get delayed and do not close on time is because of the delays in gathering the complete updated mortgage documents. A great mortgage processor will not submit the mortgage loan applicant’s file to underwriting unless the file is complete and neatly prepared.

Some inexperienced mortgage processors often just submit the mortgage loan applicant’s file and have the mortgage underwriter condition the documents required that were not submitted. This is not a good practice because it aggravates most mortgage underwriters. Mortgage underwriters want a complete neatly organized file when they get it on their desks.

Documents Required To Start The Mortgage Process With Executed Purchase Contract

Mortgage borrowers will always be asked for documents during the mortgage loan process until the date of closing. However, once you have entered into a real estate purchase contract, the real work starts. Prior to entering an executed home purchase contract, you provided the loan officer with the necessary documents required to get qualified and pre-approved. Now, since the homebuyer has the legally executed real estate contract signed by both the buyer and the sellers, the mortgage loan process officially starts.

Steps In The Home Buying Process From Executed Contract Through Closing

In this section, we will go over the stages of the overall home buying process from pre-qualification to entering into a real estate purchase contract, to getting a loan approval, and finally to closing. The homebuying and mortgage process is an actual process. There are many moving parts and a team of professionals needs to work together as a team to make the closing happen. It is the people that make a great team.

What Is The Job of a Mortgage Processor

A smooth closing happens if everyone works together as a team. The important players that need to work together as a team for a smooth home closing are the real estate agents on both sides (listing realtor and buyer’s real estate agent), borrower, home sellers, loan officer, mortgage support and operations staff, appraiser, real estate attorney, insurance agent, title company, and other third-party professionals.

Everyone involved in the home buying and mortgage process needs to work together as a team to have a smooth mortgage process leading to the closing.

How Does The Mortgage and Underwriting Process Work?

The home-buying process takes time. Many people may have heard horror stories about going through the homebuying mortgage loan process.  However, if you set proper expectations and understand the various phases of the overall home buying and the steps of the overall process from application to closing, the whole mortgage loan process should be an enjoyable experience.

This holds especially true since a home purchase is most people’s single largest investment in their lifetime. The most important step of the mortgage process is gathering the documents required for the mortgage loan underwriter. By gathering the documents required the right way, you will avoid stress, delays, and aggravation on your home loan.

The Steps in The Mortgage Process

When you are buying a house, the overall homebuying process from getting qualified and pre-approved to finding the home of your dreams and signing an executed contract is just the start of a 30 to 45-day process. Buying a home is not like buying a car where it can be done within a matter of a few hours.

How Long Does The Mortgage Process Take?

We will walk you through the six different steps of the homebuying and mortgage process which normally averages a 30-day cycle. The entire mortgage process will involve the lender requesting documents and paperwork including more documents required after the conditional loan approval.

By the time you have read and studied this guide on documents required from lenders, you will understand the importance of not just submitting the paperwork and documents required, but making sure you submit the documents required the right way. One of the biggest reasons why mortgage loans do not close on time and the reason for stress in the mortgage process is that the documents required for a mortgage are not turned in the right way.

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