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TYPES OF LOAN DOCUMENTATION
1) Full Doc: Requires all documentation that a Conforming Loan typically requires
· 2 years of job history-not mandatory for Fannie Mae or Freddie Mac approval, Alta A and Subprime requires 2 years
· Employed ( Base Salary)- 2 years of W2”s with two consecutive recent paysubs
· Employed ( Commissioned Income)- 2 years of tax returns with two consecutive recent paystubs or 1099's
· Self Employed- Last 2 years of tax returns with a copy of business license or a letter from your accountant
· Bank Statements-most recent 3 months (proof of reserves)
· Divorce Decree or Property Settlement Statement- if either husband or wife pays alimony and/or receives child and/or
separation payments
· Bankruptcy Papers- IF a BK occurred within the past 2-4 years, papers not required on Alt A and Subprime loans
· Landlord’s Name and Address- If borrowers have rented in the past 2 years ( to show a good standing of making rent
payments in lieu of a mortgage payment history)
**Full Doc allows the use of 12 months bank statements, personal or business as long as the name of the borrower is shown
on the bank statement
2) LITE DOC: Technically a Full Doc Program. Borrower does not have to bring in all the documentation normally required. The borrower ratios must be low and/or their credit is excellent.
3) Alternative/Limited Doc: Same as Full Doc but provides you with an alternative way of showing/documenting income. One of the following can be used for proof of income.
· 2 years of W2”s with a copy of your one week recent paystub or 6 months of bank statements
· Self Employed- 2 years of tax returns with one week recent paystub
· Income can be shown by also providing 12-24 months of bank statements
· Copies of canceled checks
4) Stated Income/NIV ( Non- Income Verification): Is used for borrower’s who have a difficult time of substantiating
Income. Simply, whatever the borrower states as income is documented.
· Who qualifies: Employed and Self-Employed
· Two types of Stated Income:
· Stated Income/Verified Assets: You state your income which is not verified and must show proof of Assets for reserve requirements for Principal, Interest, Taxes, & Insurance, known as PITI. Proof of Assets is any financial Instrument you retain funds in such as a checking account, savings, IRA, Mutual Funds…
· Stated Income/No Verification of Assets: You state your income which is not verified and do not have to show proof of funds for PITI.
5) NO RATIO:
· NO Income is listed on the application ( 1003) and no determination of your Debt to Total Income.
· This program is beneficial for those borrower’s that have extreme high debt which will disqualify them on their Total
· Debt to Income Ratio which most programs do not allow more than 45-55% DTI.
· Your total debt is all your monthly expenses including your present housing expenses divided into your gross income. housing expense includes your current rent or mortgage payment plus Hazard Insurance, Taxes and miscellaneous as Flood Insurance, if required.
· To qualify, borrower must have good credit
6) NO DOC/NINA:
· A loan that requires the application not to list Income, Assets, and Employment documentation.
· Must have excellent credit to qualify.
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