A client told me that he was due to be a father any day now and was having a baby girl. He told me that he hoped she turned out to be a good credit risk and could be able to get a mortgage as an adult. It made me laugh that he made this joke about the boring mortgage industry, and it made me realize how ludicrous the mortgage rules have become. Not only are people wondering if they can get a loan as an adult, they are beginning to wonder if their unborn child will get a mortgage well into the future. I joked back with him:
“Make sure you keep all of the baby’s awards, school grades, vaccination records, pay records from side jobs like mowing lawns, records of gold stars in elementary school for attendance, records of how she spends her allowances, special interests and career goals. That combined with tax returns, bank statements and pay stubs as an adult, and then yes, we can possibly have enough documentation to give her a mortgage someday in the future.”
In reality, the documentation list to apply for a mortgage can seem lengthy. To help you out, below is the checklist I send clients that want to get a mortgage. Believe it or not, this is only a basic checklist. There could be many different permutations of additional paperwork requests that result from the material below.
If any of the bank statements show deposits that are not payroll deposits, the source of those deposits should be documented (for example: gifts, inheritance, transfer of $ from another account, liquidation of stocks, etc.). Fannie Mae and Freddie Mac require a full paper trail on where these deposits originated, copies of checks, deposit slips, etc.
If any of the bank statements have more than one page, a copy of all pages (even if the other pages don’t show anything important or are blank) are needed. Depending on how long the transaction takes, you may need to send in updated statements as you get them.
If these assets are going to be liquidated or borrowed against, evidence of that is needed, as well as evidence of the deposit of the funds into the new account (such as deposit slips and copies of the check).
If any of the bank statements have more than one page, a copy of all pages, even if the other pages don’t show anything important or are blank, are needed. Depending on how long the transaction takes you may need to send in updated statements as you get them.
If a gift is given toward the purchase of the home, the following documentation is required: