First of all, when you find a home you are required to send the basic information to the lender like the check stubs, W-2’s for the past two years, bonuses, bank accounts showing last three months, child support or alimony payments which is optional on the child support and alimony. You also need the 4506-T or the 4506-EZ form which your lender will most likely email you. Now, when you ask your lender if they need anything else they most likely will say no that they have everything they need and that any day now the underwriter will have reviewed all documents. This is not 100% correct unless you are super lucky and have that amazing lender. I have spoken to many others and also closed on a few homes and this has always happened to me and the lenders where different people. So, by this time you hustle and get everything they ask for and now you feel relieved and excited and you can almost feel your keys in the hand. Back up, have a glass of wine and wait because you will get an email most likely and not a call stating you need to explain why you have deposited so much cash or a check at the same time asking you to explain in a letter or email. Believe it or not but when you have deposits usually over $400.00 at a time they question this and this can cause a problem. Silly, right! You will also need a mold report on the home and believe it or not this is important. I, myself had my loan backed up by a day because the builder of the house was away on vacation and was unable to get this and he was aware of this document weeks before. My Realtor did not keep up on this as he was supposed to so I had to call the builder and Realtor and really push extreme to get this the next day. Your appraisal has to be completed and depending on the type of loan there is an % the amount has to be as per the loan requesting. Now I am speaking from personal experience that is still in my head. Trust me I remember all the stress and emails telling me I was done sending things and this never was the story. Did you know that I also needed the apartment complex I was staying at to print me up my payments for the past year showing I paid on time? This was a pain as the building manager was never helpful with anything and this took me asking several times. These documents I needed may seem like no big deal but it really is when you prepare the documents you are told to get and then you are told to explain and now you are worried they will believe you. I still do not understand the issue with large deposits of $400.00 or more. When I would have extra money from yard sales or Craig List sales I would have to hold onto the funds until I could break down the deposits and I hated that. One time I sold a piece of furniture for $600.00 and deposited the cash in my account and I was told that if I say I make money from sales the Underwriter will ask more questions so then I decided to ask my mother to write a letter stating this was a late birthday gift which they believed. I mean I am not a drug dealer so what is the big deal?
Now, If you are self-employed that is a whole other ball game and not fun. There are many forms regarding the taxes you will need extra and this depends on how you file. For example, if your self-employed you need a K-1 form. If you made more money the year before and the year after you made less that is most likely going to get you a denial and you will not close unless you have a wonderful lender who fills this form for you and plays with the numbers so to speak. That I know from experience and that sucked. Luckily, I found a lender who knew what to do and how to play with the form. Not many lenders will risk this but I am appreciated mine did. For example, in 2014 business was booming like crazy and we were at our highlight for a small business just ran by myself and spouse in our Livingroom. In 2015 we made $50 thousand dollars less but we still make over $100 K just online and that did not include the day time job I had along with my spouse. I understand that is a huge loss but come on, we were making over 100K still and the loan was just $245 K. Most importantly, if you have any gaps at all in your employment you have to explain which I understand that. I was a house wife but my lender advised me that may still wave a red flag for the Underwriter so I decided to yet lie again and say” I was worried about my child as she was a teenager and getting in trouble with her grades and schools so I stayed home to tutor her and watch her.” By the way, so not even true at all as my child was a straight A student and never got in trouble. Lying is something I despise so much but I wanted this house and I had no choice. There may be other documents I missed but this is what comes to my mind as I look back to last year. Let me just tell you this was stressful where I sat in my car one day just eating a whole box of cookies from stress and I am thin so I do not eat this way.
Good Luck and try and relax and just get what they ask for. Much patience is so needed trust me!