Documentation

The processor will examine the application packet and collect any documents still required for processing. If there are any documents still missing from the file, the lender will contact the borrower promptly, as these documents must be collected before the loan can be approved and closed.

Depending on the applicant's situation and data, additional documents may be required, such as explanation of credit problems, copies of canceled checks or additional bank statements.

To ensure speedy processing, the applicant should provide all necessary documents at the time of application. For a list of documents required, please consult the "Borrower Documents Required" article.

Practically all conventional conforming loan programs share the same core document requirements:

  • Pay stubs for the past two pay period.
  • Bank statements for the previous two months.
  • Tax returns and W-2s for the past two years.

Some programs are called no income verification, no asset verification and no documentation loans. Unfortunately, many homebuyers and investors misinterpret the true program requirements. Contrary to what many people mistakenly believe, these programs will still require a good deal of borrower documents. They just don't require as much.

The no income verification program will not require income documentation, but lenders will still require documentation of the borrower's employment. The no asset verification program will not require documentation of the "source" of the asset funds that the borrower must have to qualify for the loan. However, the no asset verfication program will still require documentation of the current funds.

The no documentation loan is a combination of the no income verification and no asset verification programs.

The "no doc" will require income and asset-source documentation, but it will still require employment, current asset and other documentation.

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Borrowing Basics

Borrowing Basics

Some small business persons cannot understand why a lending institution refused to lend them money. Others have no trouble getting funds, but they are surprised to find strings attached to their loans.

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