For FAST loan approval, this is what you need to do…
To ensure a quick loan approval, lenders require borrowers to provide documentation for four important factors: credit, assets, collateral, and income. Here’s what you need to know to expedite the loan approval process:
- Credit:
- High credit scores of at least 640, preferably over 720, are ideal. Lenders want to see at least 3 credit lines with a minimum of 12 months history. A previous mortgage or rental history is also necessary. If you have any derogatory marks on your credit report, be prepared to explain them in writing. Additionally, if you have had inquiries in the last 90 days, lenders will want to know what they were for and if there was any new debt created as a result of those inquiries.
- Assets:
- You will need to provide at least 2 months of bank statements for any asset that you wish to disclose. Be sure to send in copies of ALL pages, including pages that are blank or full of advertisements. Lenders need to see all pages if the pages are numbered. If you have an unusually large deposit, draft an explanation of what it is from. If it’s a gift, you’ll need a gift letter from the donor basically stating that it’s a gift and no repayment is expected or implied. You’d also need to prove that the donor had the funds to give in the first place by getting a copy of their bank statement prior to the gift.
- Income:
- If you’re a W2 employee, you’ll want to send in copies of W2’s for the past 2 years. Lenders may also require that you send in your personal tax returns for the past 2 years. You’ll also need to send in pay stubs that cover a full 30 days of income. If your paystub covers 7 days, get a 5th paystub to cover the full 30 days. If there are any changes in the number of hours worked or the year-to-date earnings don’t add up to your current hourly earnings, be prepared to explain in writing.
- Collateral:
- Fortunately, there isn’t much you need to do here. This job is up to an appraiser. This will be someone selected at random so that there is no bias. This person will most likely be in and out of your home in a matter of 10 minutes or less. They do most of their work prior to this inspection. Here, they are simply looking to confirm what they’ve found online in regard to the number of bedrooms, bathrooms, etc. and to see if there is any need for repairs. Try to keep your home uncluttered. There is no need to discuss deficiencies or home improvements that you’d like to make with the appraiser. Just let them come in and get out. They will be taking pictures inside and outside for their report. This is nothing to be concerned about.
- Homeowners insurance, Homeowners association information, personal ID (i.e., driver’s license) &, many times, a social security card. If you’re a resident alien, you’ll also need to provide your green card or you’ll need to inquire about an ITIN loan. If you’re doing a refinance, we’ll need a copy of your current deed of trust or mortgage, a copy of your mortgage statement or payment coupon showing a customer service phone number, a copy of your HUD 1 or closing statement from your last closing. If you’re a Vet applying for a VA loan, we’ll also need your Certificate of Eligibility and a copy of your DD214 discharge pagers.
While some loan programs require less documentation, you’ll pay for it with higher interest rates. By providing all the required documentation, you’ll have a hassle-free lending experience.
