Home Buyer & Home Seller Guide

Consumers looking to obtain a home loan can best obtain it in today’s tight credit squeeze through a full documentation mortgage loan. This is of course not to say that lo doc and no doc loans are out of the market. In the type of credit crunch that we are now experiencing, major mortgage lenders and financial institutions are looking to write squeaky clean deals. In other words they are looking to write business that can be well substantiated. Under the given circumstances, applying for a full doc loan is one of your best options to obtain finance for a mortgage loan.

Documents Required To Obtain A Full Doc Loan

When applying for a full doc home loan you will require some of the below mentioned documentation:

1. If you are the employee of an organization, the bank or the financial institution will need to see your pay slips to confirm your declared level of income. Pay slips also help the assessing officer confirm the length of your employment by using what is known as the “year to date” figures on the pay slips.
2. If you are self employed the bank will want to see your tax returns in combination with your W2s for the last 2 years. In certain cases even if you are employed by someone else the bank may ask for your W2s.
3. Your credit officer may want to see the last 6 months worth of statements of your bank account to order to see a savings pattern and also to discover any undisclosed debts by looking at the payment going out of the account. If you have credit cards, the approvals officer will also require seeing the statements for that to ensure that you have no been over the limit or have not been in arrears etc.
4. If you are applying for a refinance, you will also be required to provide your home loan statements for anywhere between 6 and 12 months to ensure that you have been making your repayments on time.
5. The bank will usually order an appraisal on the value of your home and will wait for the valuation to come in.
6. The bank/ financial institution will also need to see the contract that you have entered into for the purchase of the house and in case of a refinance the bank usually does a title search.
7. In addition to this if you are applying for state or federal grants, such as, the first home buyers tax concession etc, you will need to complete all the paper work and supporting documentation for the same and submit it.

Consumers may like to keep in mind that for some consumers who have credit scores of 700 and above you may not require a lot of the documentation that is usually asked for.

Advantages Of Applying For A Full Documentation Loan

• The biggest advantage of applying for a full doc home loan is the fact that the interest rate applicable on your loan will be much lower than that of a lo or a no doc loan.
• Mortgage insurance on a full doc loan will kick only when the mortgage loan is above the 80 percent mark on as far as the loan to value ratio is concerned. In case of lo doc loan it usually is applicable beyond the 60 percent mark. This means that full doc home loan applicants can apply for larger loans without having to worry about the implication of mortgage insurance.
• Most full doc customers who have their documents in order experience swift processing times and usually get their loans approved rather quickly.

Hence consumers who are looking to apply for a home loan may want to consider applying for a full doc loan.