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.

It has been discussed at great lengths that the current real estate market is a buyers market. However, we also know that we have experienced the mother of all credit contractions in the recent past. While there are a plethora of purchase options open to qualified buyers, the questions remains how many of us are actually going to qualify for that much needed home finance in order to be able to close that home deal.  Prior to even considering the purchase of a home loan it is absolutely necessary that you choose the right mortgage loan and check whether you qualify for a loan to begin with. Getting yourself a pre-approved loan or checking your pre-qualification status can go a long way to save you heartache and disappointment in the future.  When looking at whether you qualify for a loan it is important to under stand what your home loan officer is looking for. Listed below are some things that you can be rest assured would be a focal point during a pre-qualification process.

Mortgage Home Loan Qualification

Willingness To Pay

If we were to describe this in a couple of words, they would be “credit score”. As credit contracts lenders lay a lot of emphasis on your credit score. You willingness to repay is rather evident from your credit score.  Home loan lenders usually demand “A” rated credit scores. These are credit scores, which are 620 and higher.  In certain cases if your credit score is exceptional, for instance if you have a credit of 700 plus, in such circumstances you may not even need to produce half the documentation that would normally be required.

Positives On Your FICO Score

Listed below are some of the points that reflect positively on your credit score and consequently ease the pre-qualification process:

• One major plus is not having any repayments, which are older than 30 days in the span of the last 12 months on your credit report.
• If you have credit cards and/or lines of credit and have only used a part of it, while the other remains untouched, this too adds points to your credit score and would also impress the assessing officer.
• Another major point booster is having debt obligations/loans paid off either on time or early.
• In addition to the above if you have been paying down your credit cads or line of credit in full each month, this too looks very impressive during the qualification process.

Negatives On Your FICO Score

Here are a few things that would really prove to be a setback to your FICO score.

• Late payments during the last 30 days.
• Loans, which have a charge off, listed next to them.
• If you have been maxing out your credit cads or lines of credit, be rest assured that it has lessened your credit score.
• Not having a credit file. If you feel that you are uncomfortable with borrowing and as a result of that you do not have a credit card and no record of a credit, history, you would have taken away any information for your credit officer to base a decision on. It is vital to have a credit  file.

Capacity

If there are ticks against all the above, the last thing your lender is going to check is your ability to make the repayments on your home. This would include checking your payslips and if you are self-employed your tax returns. You need to clearly exhibit the capacity to make the repayments on your home loan while being able to lead a normal life.

These are some of the things that your lender will check to make sure that you qualify for one of the many types of home mortgage products.