Is Your Loan App Ready for Submittal
Investors hit the ground running at the beginning of 2023 as loan originations are up sharply on the investor front. This is primarily due to investors finally getting their heads wrapped around the new normal for interest rates and accepting that these rates may be here to stay for most of 2023. But, with likely only 1 more Fed rate hike. That being said, the competition is starting to heat up for finding new deals. Is your application ready?
When you do find that next deal, you’ll want to be able to move quickly so your lender can get everything into processing quickly. Here is a brief list of the documentation/information your lender will likely need:
- 2 most recent bank statements (Business/Personal). Make sure you have enough reserves to cover not only your down payment, but enough left over to cover your potential mortgage payment for up to 12 months (most applicable to DSCR loans).
- REO schedule detailing your most recent fix & flips & current rental properties owned (this is how private lenders verify your experience).
- Is your credit in good standing? Remember, you can get copies of all 3 credit bureau reports free once a year. However, there are several free FICO score monitoring sites that serve as a great gauge to see where your overall score is.
- If you’re purchasing a fix-up property, have your detailed budget ready to go with as much detail for each line item as possible. This will help ensure you get the highest ARV valuation as possible by the appraiser/ BPO agent/lender internal valuation team, and thus improve your chance for getting the highest LTV (less money out of your pocket).
- If you are asking your seller to contribute monies towards closing costs, verify with your lender how much Seller Concessions are allowed per lender guidelines.
Having these items ready will ensure a smooth underwriting and get you to closing as quickly as possible (sellers love that!)