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Stuff your lender will need;
Employment: Employment
addresses for two full years.
Gross monthly income.
W-2's if available.
Proof of pensions, retirement, disability or social security.
Proof of income from rentals, investments, etc.
Proof of child support or alimony paid/received. Year-to-date pay
stub/last 2 pay stubs generally required.
If self-employed: Two years
1040 tax returns, Current year profit and loss statement
Creditors: Each creditor's
name, address, and type of account.
Account numbers, monthly
payments and approximate balances. Amounts of child care expenses
Banking: Names and
addresses of saving institutions. Account numbers for all accounts. Type
of accounts and present balances.
Miscellaneous: List
of assets in stocks, bond, land, Life insurance cash value (documented if
to be used as cash down payment) If applicant is selling a home, a copy
of sales contract. Social security numbers for all parties. Veterans -
certificate of eligibility & DD-214 Cash or check to pay for
application fee. Divorce papers
Some helpful terms and
definitions; Adjustable
rate mortgage (ARM): A loan that has a
changing interest rate. Most loans of this type have a lower starting
interest rate and may increase yearly, but not beyond preset limits.
Good for buyers who expect increasing income, or who will be re-selling
the home in 5 years or less.
Annual percentage rate (APR): The combined interest rate with all
other finance charges and fees-expressed as a total amount of the loan.
This information must be disclosed to the borrower under the federal
"truth in lending" law.
Fixed rate mortgage: A mortgage in which the interest rate and monthly
payments remain constant over the life of the loan.
PITI: an abbreviation for principal, interest, taxes and
insurance. Commonly synonymous with the total monthly payment due.
Private mortgage insurance (PMI): An insurance policy that
protects the lender against losses up to the policy limits on a
defaulted mortgage loan.
Mortgagee: The party in a mortgage transaction who holds the
mortgage as security for a loan, usually the lender.
Mortgagor: The party who gives the mortgage as security for debt;
the borrower.
**Note regarding "mortgage". In Colorado, the "public trustee" holds your "trust
deed" as security for the loan. This is different than in some
states where the lender holds a "mortgage" as security for a
loan. The main difference is the way that defaulted loans are handled. A
"trust deed" state will result in a faster foreclosure on
defaulted loans.
Origination fee: Fee charged by the mortgagee for originating a
mortgage loan. Covers credit reports, loan application and other
administrative costs. In the current market, typically 1% of the loan
amount.
Mortgage Banker: Someone who represents funding sources such as
life insurance companies and other investors. Mortgage bankers locate
borrowers, close the loans and then continue to service them for a fee.
Mortgage Broker: An intermediary agent who, for a fee, brings
together borrowers and lenders to effect loan transactions.
Closing costs: Any charges and fees that will need to be paid at
closing. Examples include, appraisal, loan origination, loan closing
fee, document recording fees, etc...
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