CodeMark TV Episode 20
We’re talking about the underwriting process. To recap real quick: We got you pre-approved, you’ve made an offer, you know the money that you have to invest in your real estate transaction, your offer has been accepted, congratulations! Now, your file is heading to underwriting.
The sales contract is typically written for about 30 days. Sometimes a little more, sometimes a little less. Let’s go ahead and use 30 days for the example, and we’ll call 30 days about four weeks in a month. So week number one, that’s what we’re talking about today.
Week number one, what are you supposed to be doing?
Gathering your paperwork. What does your paperwork look like? Well, the lender is going to want to qualify your income, your assets, and who you are. How does that break down?
Typically you probably get paid a salary; if you are self-employed, let’s talk about that as well. As a salaried employee you’re going to provide your W-2s for the last two years, you’re also going to provide your tax returns for the last two years. If you’re self-employed, tax returns as well, for the last two years, possibly three, and you’re also going to have to provide your business tax returns, as well. It’s a lot of paperwork, but this is what it looks like when you want to ask for some money from the bank.
Number two, also breaking it down on the income, paycheck stubs; you get paid on the 1st, you get paid on the 15th, maybe on the 15th and on the 30th, on the 31st you’re gonna have to provide your paycheck stubs. Last two paycheck stubs if you get paid bi-weekly; if you get paid weekly, last four paycheck stubs.
Now, you’re going to need money for a down payment, it’s called your assets.
Where does that come from? Well, it’s probably parked in the savings account, checking account, combination of the two, money market account, maybe you’re going to borrow money from your 401K. You’re going to have to provide two months worth of those statements, all pages, and I emphasize again, all pages. Why?
It’s probably been a long time since you’ve ever printed a bank statement, but if you ever print a bank statement, typically the last page or two will say “intentionally left blank”. Underwriters look at the number in the corner that says “one of ten” and you provide them with one through eight, without nine and ten, then they’re like “well, where are they?” even though it says “intentionally left blank”; as ridiculous as it is, all pages.
Other supporting documents
A copy of your driver’s license, copy of your social security card, basically what they’re looking for is two forms of ids. Do you see the trend here? two-two two-two, two years worth of tax returns, two years worth of W-2s, two months worth of bank statements, two paycheck stubs, two-two?
These documents are what you can provide in week one. Now, week two, once all of this is in, you’re past your option period, you’re past inspection, hopefully, and then you’re going to get your conditional approval. We’ll talk about that next time. Until then, I’m Mark MacInerney President and CEO of Codemark Financial. You can catch me Friday, Lunch with Mark, Facebook Live, and you can catch me all the time here on Codemark TV.