Culprit #1 - Show Me The Money
“Why
does it matter where the money came from if I have the money??” Countless home buyers have asked me this, and
it’s a valid question.
Unfortunately, when it comes to getting a mortgage loan approved, the
bank not only wants to know THAT you have the money, they want to know where that
money came from.
Your
lender is typically going to ask for your last two months’ bank
statements. She will then look at every
deposit showing on that statement to see what it is. If it is the direct deposit of your payroll,
no problem. If it is a smaller deposit
(typically under $250), that’s fine. If
you have deposits that are not small or are not a direct deposit of pay
though, the lender will want a signed letter from you explaining what the
deposit is and a copy of the deposited item or some other documentation to show
the source (a check stub, expense report, etc.).
These items are typically obtainable by the home buyer but it can be a hassle. Odds are you didn’t keep a copy of the check that your bother gave you two months ago for his half of dad’s birthday gift, right? Your bank can likely print those items out for you if needed (some charge a fee). If you’re lucky, your bank will automatically scan all your deposited items in and have them available online as a part of their online banking, making it easy for you to print them out. Easy or hard, though, you will have to get those for your lender so be prepared for that and keep copies as you go if possible.
These items are typically obtainable by the home buyer but it can be a hassle. Odds are you didn’t keep a copy of the check that your bother gave you two months ago for his half of dad’s birthday gift, right? Your bank can likely print those items out for you if needed (some charge a fee). If you’re lucky, your bank will automatically scan all your deposited items in and have them available online as a part of their online banking, making it easy for you to print them out. Easy or hard, though, you will have to get those for your lender so be prepared for that and keep copies as you go if possible.
Culprit #2 - A Little Me Time
It’s
not uncommon for people to take unpaid time off. Vacations, family situations, or even just a
little ‘I need a break’ time is all a part of the rhythm of work and life. When the bank is looking at your pay stubs,
though, they’re looking for consistent hours.
If you’ve had unpaid time off in the last month, the lender
is going to need to find out if this happens often so that she can
calculate your income correctly.
To
verify this, the banker will probably need to send a form to your employer to
fill out. You also might need to write a
letter explaining the unpaid time off and clarifying if it is a repetitive thing.
If your employer doesn’t return the form promptly, you may need to get involved
to encourage them to get it back to your lender.
All
of this is more work for you and your lender.
As best you can, try to avoid unpaid time off in the months leading up
to a home purchase. You’ll likely want
to save that type of time for once you’re a home owner anyhow, because there’s
ALWAYS stuff that needs done then!
Culprit #3 - 'Close Enough'
Your
lender is going to ask you for a lot of paperwork. You might go through the list, gather up most
of it and then decide “That's close enough”.
'Close
enough' is not good enough. The lender
needs everything she asked for.
If she asked for all pages of your bank statements and one page is
completely blank, she needs that blank page.
If the lender asked for your full federal tax returns and you think the
first two pages provide enough information, it doesn't. She asked for it all because she needs it
all. Giving the lender just part of what
she asked for will just make the process more frustrating for you because she
will come back and ask for the rest.
Make life easier for you and your lender – give her everything she
requested upfront instead of hoping that 'close enough' will work.
