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VA Mortgage Loan: List of Documents & Conditions Necessary To Finance Your Home
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VA Mortgage Loan: List Of Docs & Conditions Necessary To Finance Your Home.
FICO: All lenders 620; many will go as low as 500!
ALL lender will go with ZERO down.
Have Your DD214 handy it is indeed your passport to success.
2 years tax return, W-2 YTD earnings.
Loan application, form to pull credit, Form 4506-T for IRS transcripts.
Picture Id & signed copy of SS card.
Last 2 months bank statements: Although your down payment will be ZERO, you still need to prove that you can pay the mortgage payments when they become due
No new credit application until closing
Conditions may apply when your credit report comes back like a letter of explanation for any derogatory data in in your credit report. See samples below.
FICO® Scores
Mid-Score of 500 or higher. FICO at 620 is preferable and ALL lender will work with you!
However, not all lenders will not do a loan for a borrower with scores below 620.
So, shop around, if you need to. (*1) (*2)
I - You may know that there 03 main Credit Bureaus:
Equifax, Transunion and Experian;
II - Each bureau produces a FICO® Score according with the information
they have on your credit activities in their respective files
III - Because not all lenders use all three bureaus so the data will be different
IV - AND because there can be outdated data on you in some of the bureaus, the scores will rarely, if ever, be the same
V - It has been a long stablished practice that the mortgage lenders will discard both the highest and the lowest scores AND they will use the mid score to make their decision
VI - (*1) If you have had some extreme hardship – like loss of job (but you are since employed again), death of your espouse, divorce: it there can be some exemptions.
I would say, very specially, if the hardship happened because you were deployed overseas!
In any of these circumstances, talk with your Loan Originator
VII - (*2) Elsewhere and in several pages of this website/blog about the advantages of getting your Congress mandate FREE Annual Credit Report. It is completely free once a year all across the USA. Depending where you live it can be more than once – still free!
In possession of your Credit Report, you can check if there is any ‘old data’ that should no longer be in your records and/or any incorrect entry/ies that you can (and should) ask to be removed. The bureaus are obligated to keep our records (yours and mine) straight!
Sometimes a couple of those pesky errors put you off a few points of what you need to qualify for the loan AND/OR get better rates!!!
Here is the List of The Documents and Conditions to Get Your Well-Deserved VA Mortgage Loan To Purchase Your Home:
1) First AND foremost: Have your DD214 handy! It is your passport to success!
a. I have with some Vets that moved so much and misplaced their original copy
b. No worries, sir/ma’am: The VA always welcomes you back with open arms and they will supply you with a spanking new copy!
c. Please click on the link at the end of this paragraph to be direct to the VA site and a copy of your DD214 will be in your possession – VA DD214 copy request
2) Most recent 2 months statements of ALL asset accounts:
[ ] Checking [ ] Savings [ ] Investments
[ ] Retirement accounts
[ ] If you are retired – letter stating any earnings
[ ] SS Award letter for the current year
Note: Submit ALL pages, including blank pages
3) PROOF OF INCOME: Most recent two years Complete Tax Return 1040
IF employed:
a. Most recent two years W-2 -assuming they are available
b. However, the most recent 30 days W-2 clearly showing the year-to-date earnings is necessary to show continuing employment
c. At some point of the application a Form 4506-T Signed – so that lender can attain a transcript of your tax return to cross reference and verify your 1040 (please see below)
IF Self-Employed: 1040-SE Tax Return and 1099 forms if available
I. If you file quarterly, please have filing copies handy
II. Bank statements of last 60 days will incredibly valuable to prove your inflow
III. At some of the application a Form 4506-T Signed – so that lender can attain a transcript of your tax return to cross reference and verify your 1040 (please see below)
4) Letter of explanation regarding anything derogatory on your Credit Report
Keep it simple and straight forward – 2 or 3 paragraph of 2 or 3 lines each, Like:
a. In this date I got divorced and I got behind on some payments for a couple of months.
Sincerely,
b. I lost my job and it took 45 days to find another. Yours truly,
c. I was between jobs and I have to hang on to my savings. But I caught up with payments very quickly as soon as I got a new job. Thanks,
d. I moved and did not get my statement on time. Best,
e. I was deployed overseas and my brother was lax with the payments in my name. I changed to pay on line and it was fixed. Thanks,
5) Copy of a Legible photo Id government issued typically:
driver’s license, military issued id or passport
6) Copy of your signed social security card
7) Loan Application: You will also submit a complete and signed Loan Application
8) Consent form to pull your credit reports from the bureaus
9) Form 4506-T Sign request for the most recent two years tax return from the IRS (To check against the already provided tax returns)
No New Credit Application
By all means, please avoid the following scenarios:
I. Do NOT spend or make any major purchases unless you have it okayed, in writing, from your Loan Originator.
I would say that you if had a medical emergency, lenders will be more forgiven…
However, wait till after the closing to buy furniture or a new car
…you can buy a house and then buy a new car …next day if you wish!
However, the reverse will NOT happen!
The Lender will ditch your home purchase and it will be another couple of years when you can qualify to buy a house again!
I had one client who bought a car for her husband while we were working her finances to buy a home!
She went to her car dealer for a ‘scheduled maintenance’ visit and told the ‘sneaky’ car salesman that her credit was good and she was going to buy a house.
He asked if he could pull her credit and she agreed. He said that she could ‘buy a car’ AND still ‘buy the house!’
She walked away from there with a car for her hubby alright!
And goodbye to the house!
It should have been: Buy the house first …AND buy the car next day!
After you are a ‘home owner’ - car dealers might give you a better rate to buy a car!
II. Do NOT attempt to get financing on anything unless you have it okayed, in writing, from your Loan Originator.
I am quite sure the answer will be ‘no!’
This is another red flag that mortgage lenders do NOT like AND most will reject your mortgage application …more so if you consummate any purchase on that application
For these two last situations the advice is quite simply: No credit application whatsoever after you start the home mortgage loan application!
Wait until you have closed! Do NOT even make an application – There should be none till you close!
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