5 Situations Requiring Extra Paperwork While Applying For A Mortgage Loan


When getting ready to apply for a mortgage, there are two scenarios that are likely to occur. On the one hand, the task of rounding up all the necessary documentation may be simple. On the other hand, it may be one of your worst nightmares. Your financial capability and credit condition as a borrower go a long way to determine your eligibility for a loan. For instance, individuals with bankruptcy are required to gather all the necessary financial documents for assessment. Here is more on scenarios that may require paperwork when you apply for a mortgage loan.

1. Foreclosure and bankruptcy

Depending on the type of lender, you may be required to produce court documents, deeds and credit reports as far as foreclosure and bankruptcy are concerned. In particular, an applicant who has foreclosure will be required to provide a trustee’s deed, which states the date of property sale. As for individuals with bankruptcy, they have to gather all their financial documents. In addition, a mortgage broker may ask you to come with a personal statement if you are bankrupt. Therefore, examine yourself carefully to determine the category that you fall into so you can make effective choices.

2. Are you a non-citizen?

There are also lender requirements for non-citizens. Essentially, underwriters will ask for your birth certificate if you are a non-citizen. This also applies to applicants who do not have a national I.D. More often than not, non-citizens are required to document the status of their legal residency. Although lacking identification may not seem like a show stopper, it may end up causing unnecessary time wastage.

3. Divorced applicants

Lenders are going to ask you to provide a clear copy of the divorce decree. Note that this is applicable despite the amount of time that you may have been divorced. This is necessary because any asset that is money related needs to be properly documented. This is usually inclusive of anything that is received as alimony. Therefore, it is important to ensure that the underwriter gets all the necessary information to make the process much smoother.

4. Loan adjustment

There are also cases of loan modifications. Invariably, a loan modification happens to be one of the last resolutions when you want to stave off a foreclosure. Any applicant who has had a repayment plan will have to present paperwork to the lender so he can have a look at the modification agreement.

5. Personal income

Lastly, you will have to document all your assets. That boils down to presenting paperwork detailing personal income. Your level of income is necessary because lenders want to assess your ability to repay a certain amount of loan if granted mortgage.

These are basically the five areas that you may be required to document. It is important to ensure that your paperwork is on point. This is because it serves as an efficient tool for future references. Whatever category you fall in, always be ready to produce the necessary documents that may needed by lenders to process your loan application.

Leave a reply