LTV ratio maximums vary depending on the lender and the type of loan.
What is a document needs list?
The document needs list is a list of key forms and documents a person taking out a mortgage needs to have on hand so that the lender can determine whether it will extend a mortgage to her. Typical items include paycheck stubs, tax returns, bank statements, and other data proving financial worth and creditworthiness.
Mortgage lenders require documentation that proves an individual is capable of making his or her loan payments on time. Underwriters have the job of verifying each detail and document. They need to look at how much income an individual has, how much debt is present, and how the individual manages money.
To do this, the underwriters need a significant amount of actual documentation to prove the claims made by the borrower. They provide a document needs list that outlines which documents a potential borrower needs to obtain and submit to them in order to process the loan.
Common types of documents include paycheck stubs, tax returns and most recent W-2s, bank and retirement account statements, insurance policies, and stock options. But every borrower has a different financial background, and every item on the document needs list might not be relevant in every case.
To get started in purchasing a home, visit Bankrate’s mortgage calculator and learn how much you can expect to pay.
Document needs list example
The Jacobs hope to purchase a home. They find one they like and submit a bid on it. They find a mortgage lender to pay for their home, who gives them a document needs list that illustrates all the documents the lender will accept as proof of their ability to pay back the loan.
The Jacobs submit only the documents that are relevant to them, so they can safely ignore the lender’s request for stock options, of which they have none, and pension benefits, which they don’t receive. Once the relevant documents are submitted, they need to wait for their mortgage lender to approve them.