The processing stage of the approval process requires the gathering of the following documents:
- Verifications of Employment – Forms are sent to past and present employers for last two years to verify income and time on the job.
- Verifications of Deposit – Forms are sent to banking institutions to verify average bank account balances for past 2 months (some banks will charge borrower a fee of up to $20 for this verification). Usually takes one to two weeks.
- Credit Report – Requested at the time of application. If errors or inaccuracies are reported, additional supplements are requested for clarification.
- Preliminary Title Reports – Title Reports reflect the ownership and sales history of a property. The title work is requested from a third party company of your choosing. They research the property and borrower(s) for any legal items, liens, loans that may affect title to the property.
- Appraisal – An appraisal will be independently ordered from a FHA approved appraiser. The appraiser will visit the property, measure square footage, verify FHA required property conditions, check other recent comparable home sales, and determine value of the home.
- Purchase Contract – This is for purchase transactions only. This is the original contract regarding the terms of the purchase of the property. We will need all of the completed signed (by both parties) forms prior to ordering the appraisal, as appraiser requires a copy of the contract. This will typically be provided by the realtors.
- Letters of Explanation – Letters written and signed by borrower to explain any issues on the credit report, recent credit inquiries, work history, bank account deposits or variances, source of funds, etc. Usually complete after receipt of all other documents.
- Additional supporting documents – Additional paperwork may be needed on a case-by-case scenario. This could include, but is not limited to, items such as: 12 months cancelled checks to verify applicant is not making payments on an account or alternatively is receiving income from another individual, complete bankruptcy, divorce, child support papers. An applicant’s individual circumstance will determine what documents are required.
- Any documents missing from initial loan application – Any paperwork missing from original loan application and loan opening such as: two months recent paystubs, two months complete bank statements (all pages), last two years tax returns, photo ID, etc.
Since we are requesting and receiving all of these documents from various companies and individuals, this process is time consuming. This portion of the loan process normally takes one week.