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Purchase Checklist

  1. Send in these items as soon as possible, same day or next day will allow us to meet deadlines.
  2. These items are required by government agencies such as: Fannie Mae, Freddie Mac, FHA or VA, not Capital Bank.
  3. PDF file format is fine, images/JPEG/phone pictures are not allowable.
  4. Upon review of the documents you provide there may be additional items required.
  5. A credit alert you see for an inquiry by Settlement One or United One are credit bureaus that we use.
  6. Make me aware of upcoming travel that may affect your ability to respond in a timely fashion.
  7. Documentation requirements may change at anytime.

Income Documentation if Salaried

  1. Copies of your most recent W-2 forms from the last two years.
  2. Copies of two of your most recent, consecutive pay stubs: The pay stubs must clearly show the pay period and it must identify the full name of the applicant. Send in updated pay stubs as you get them. If there are any deductions on the pay stub for a loan, that loan will have to be counted towards the debt ratio. If there are any deductions on the pay stub that go towards the deposit of a 401k or some other asset account, a copy of a recent bank statement to show that asset is needed.
  3. If you receive bonus or commission income we will need copies of end of year pay stubs from the end of the last two years, that will break down how much income was from bonuses or commissions each year, so we can compute the required two year average.
  4. A name and phone number are needed for a “verbal verification of employment.” We are required to call a supervisor or human resources person to verify ongoing employment.

Income Documentation if Self-Employed

  1. Copies of federal personal tax returns from last two years. All pages of each return are needed if you are self-employed, earn commissions, earn dividend & interest income, or own rental property.
  2. Print the signature page of the tax return which is usually the second page and sign and date it in ink, with the current date, at the bottom of the page where you would normally sign.
  3. Corporate tax returns for the last two years will be needed as well as personal returns if the self-employed individual owns over 25% of a company. By the same token, if the borrower owns more than 25% of a Partnership, then complete Partnership returns from last two years as well as complete individual returns are needed. The Partnership returns should have the K-1 forms attached.
  4. Profit & Loss statement through most recent month (only if self-employed or commissioned. A P&L shows gross income, then expenses, then net income from the start of the year through the most recent month). The Profit & Loss Statement must be signed by the preparer (the preparer can be the borrower, or the borrower’s accountant). Click here for a sample profit and loss statement.

Other Income Documentation

  1. If the borrower derives income from Retirement or Social Security you need evidence of receipt of this income. Provide copy of three months bank statements with all pages of each statement, showing direct deposit of this income. Also needed for any retirement or social security income is a letter, usually called an “award letter” that outlines the terms of the pension, retirement or social security.
  2. Discuss any other source of income you may have that has not already been discussed, no matter how small. Other income that need to be discussed can include a “side business”, a business that makes very little money, a business that only has small losses, any business in which you are a minority owner, part time jobs or consulting jobs.
  3. A copy of a current lease on all rental properties owned. If there is no current lease and the tenant is just renting month to month you can get what is called a “tenant letter.” The tenant must write a letter stating they are currently your tenant, how much they are renting for, and the address of the property they are renting. This letter must be signed by the tenant.
  4. If borrower has had several jobs (three or more) in the last two years, you should provide a “job history letter” explaining the job path you have taken over the last several years. You can also use a current resume instead of writing this letter.

Asset Documentation

  1. To read about important information regarding why it will be likely that other supporting documents will be needed as a result of deposits on your bank statements click here.
  2. Copies of 2 most recent, consecutive bank statements: If any of the bank statements show large deposits that are not payroll deposits, the source of those deposits should be documented (For example: gifts, inheritance, transfer of money 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.
  3. Copies of the 2 most recent statements (or most recent quarterly statement) on any other assets (like stocks, CD’s, 401k, IRA, etc.). If these assets are going to be liquidated or borrowed against evidence of that is needed. We will also need 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.
  4. For all account statements, screenshots without any identifying information cannot be used. Do not blackout or scratch through any information. And documents cannot be cut off on any side.
  5. To show that the earnest money deposit that you gave with the sales contract has cleared your account, when you can, please provide a transaction history statement from the account the funds were drawn on. The start date of the transaction history should be the day after the end date of your last monthly account statement through the date you are printing out the transaction history. The document needs to have all identifying information on it such as the bank logo, your name, address and account number. If you are printing something out from the Internet and it doesn’t have all the identifying information on it you will have to contact the bank and ask them to send you something more formal.
  6. If possible please do not move money from account to account during the transaction, which would trigger more documentation to create a paper trail for the transfers. Once the loan is both conditionally approved and then given the “clear to close” then it is safe to move money around to prepare to pay the final amount of monies due at settlement.
  7. It is critical to make sure you allow sufficient time to process any liquidation of funds needed for closing. Whether you are going to liquidate stocks, liquidate or borrow against a retirement account, or receive funds from a trust or inheritance; please research in advance how much time is needed to do order, process and receive the funds. And provide the paper trail to show existence of the asset, the order to liquidate or borrow against the asset, transfer of the asset, and receipt of the funds.
  8. If a gift is being given for the purchase of a property you need to provide:
    1. A completed gift letter. A gift letter will be sent to you by my assistant.
    2. Evidence of “donor’s ability” to give the gift, and evidence that the gift has been transferred out of the donor’s account, and evidence you have received and deposited the gift in one of your accounts.
    3. Documentation for #2 above varies depending on how the gift will be given:
  • There are gift guidelines that say a gift must come from an immediate family member on a Conventional loan, and on an FHA loan it may come from someone outside your immediate family but there has to be a demonstrable and documentable close relationship.
  • If the gift is sent in the form of a paper check provide a copy of the personal check and your deposit slip. And provide an account statement that shows that the deposit cleared your account and make sure that account statement has all of your identifying information as well as the bank logo on it.
  • If the gift is sent as a wire provide a copy of the wire confirmations, both the outgoing wire confirmation from the donor and the incoming wire confirmation from the homebuyer. And provide an account statement that shows that the wire cleared your account and make sure that account statement has all of your identifying information as well as the bank logo on it.
  • If the gift is sent in the form of a cashiers check provide a copy of the cashiers check and deposit slip. The donor should be listed as the remitter and the mortgage borrower should be listed as the payee. We would also need to see documentation showing the funds for purchasing the cashiers check came from the donor’s account. And provide an account statement that shows that the deposit cleared your account and make sure that account statement has all of your identifying information as well as the bank logo on it.
  • Click here to read an interesting article on the “gift tax”.

Other Documentation

  1. Do not make any large purchases, open a new credit card account, pay down a large amount of debt, or make any large financial changes after loan application. If a job change is imminent please advise us. Any sudden financial moves may cause a problem with your debt ratios or your credit score. To read about important information about this click here and click here.
  2. Discuss any expenses you have that have not already been discussed. Expenses that need to be discussed and documented can include property taxes and homeowners insurance on property which is mortgaged or owned free and clear, unreimbursed business expenses, alimony and/or child support, child care expenses need to be disclosed only on a VA loan, tax liens in a repayment plan, and deferred student loans no matter how long the deferment status is.
  3. On Jumbo loans only, provide a legible copy of a driver’s license for each borrower on the loan.
  4. On Jumbo loans only where the borrower is a first time homebuyer the most recent 12 month rental history will need to be documented with the most recent 12 months of canceled checks (copies of the front and back sides of each check), or if the payments were not made via check but were made by ACH transfer then 12 months of bank statements would be needed with the information on each month’s rent check circled. Also needed is the name and phone number of your landlord so that we can send the required “Rental Verification” form for the landlord to complete.
  5. A legible copy of all pages of the sales contract signed by seller & buyer including all addenda.
  6. Copy of all pages of a *Divorce Decree and Separation Agreement* if divorced or separated.
  7. Name, address and daytime phone number of all *landlords* over the past 2 years (unless you have been a homeowner over the last 2 years, then this information would not be needed).
  8. If the borrower is not a U.S. citizen please send a copy of any Visa or Permanent Resident Card.
  9. If the property is to be put in the name of a Trust at settlement, copies of all pages of the trust agreement will be required.
  10. If any borrower will be out of town for settlement, please advise us in advance and we can discuss if getting a Specific Power of Attorney for someone else to sign the closing documents for them.
  11. If your property is a condominium banks require a condo questionnaire to be completed, and most property management companies charge a fee to complete this, which can range anywhere from $100 to $250. We will alert you as to what this fee is and collect it from you later. We will need the name and contact information for the property manager of the condominium.

Homeowners Insurance/Inspections

  1. You must have a homeowner’s insurance policy 7 days prior to settlement. Please provide the name and phone number of the insurance agent you intend to use, as soon as possible.
    If you are purchasing a condominium, the insurance is part of a “Master Umbrella Policy” that covers the whole building, and payment for this is included in your condo fee. You won’t need an insurance policy that covers the dwelling/structure.
    However, you will want to get insurance to cover your belongings. This is similar to a “renters policy,” and may also be called a “contents coverage policy.” If you experience a theft of belongings out of your condo, the insurance that the condo carries on the dwelling will not cover you, so this additional “renters” policy is a good idea.
    There is also a Fannie Mae requirement for HO6 insurance, which you can read about by clicking here: HO6 Insurance.
  2. Termite inspection: a termite inspection is usually not required on Conventional loans (it will be on an FHA or VA loan) if the termite clause is stricken from the sales contract. However, if the termite clause is left intact the bank will want to see a copy of the termite inspection. If there is no termite inspection required by the sales contract but a homebuyer plans to get one anyway it is critical that the homebuyer instructs the title company not collect the fee at settlement, but instead the homebuyer should pay that fee directly to the termite inspection company. For more on why this is important and will help avoid a delay read this.
  3. Structural inspection: lenders do not require a copy of your structural inspection, there is no need to provide that to us.

Submission of Documentation

  1. As stated previously, more documentation may be needed. An underwriter may see something in the loan that they feel requires more explanation. Or Fannie Mae, Freddie Mac, FHA or VA may make sudden changes to their requirements that impact the required documents needed on your loan application.
  2. Do not give notice to your current landlord and/or do not schedule movers until we have loan approval.
  3. You will receive loan disclosures which must be returned same day/next day. Federal rules say we cannot order the appraisal without the signed disclosures, so we have to have them back immediately to ensure we meet contractual deadlines and meet the required settlement date.
  4. These documents will be securely uploaded within our application when you start our application process.
  5. Please upload PDF’s of the pertinent supporting documents, do not upload camera phone pictures, TIFF’s, JPEG’s or other file formats.