by Kristin Abouelata

Created on: October 30, 2007   Last Updated: October 31, 2007

It seems like some loans require very little documentation from a borrower, while other loan types require a blood sample (not really, but it seems like it!) What documentation should you be prepared to provide a mortgage lender?

I often joke with customers when giving them the list of documentation that I need to process their loan that they will also have to bring me a DNA sample. Usually, these customers are first time homebuyers or their loan is a government product. But, it begs the question as to what documentation will a lender request from you when processing your loan? Why do some people need to bring a wheelbarrow of documents to the lender and some people can show up empty handed?

It all depends on your credit history, the loan to value of the property you are buying or refinancing, the loan product you are using and the type of loan you need. Change any aspect any of the aforementioned, and your documentation requirements can change. Also, recent underwriting guideline changes resulting from widespread foreclosures have resulted in a tightening of the documentation regulations.

If a borrower is buying a home, has a credit score above 720 and is putting at minimum a 20% down payment on the property, it is very likely the documentation required from the borrower to process the loan is nada. Zilch. Zero. The lender will still need a fully executed and legal sales contract, a good appraisal, and will independently verify employment, but that's it. See ya at the closing table. And, if your loan to value is low enough (i.e., you're putting a ton of cash down), the lender might not even care about getting an appraisal of the property. Now how easy is that?

However, at the other end of the spectrum is the DNA sample. Say you have an "iffy" credit score, below a 620. Maybe you had medical collections in the past. You perhaps you're a first time homebuyer who qualifies for a government program. Or, you could be self employed. You own multiple properties, too. Ok, then you might as well be prepared to leave a hair sample. All kidding aside, be able to document a lot of information. Possible bridges to cross depending on which of the previous scenarios applied may include that your lender wants a 3 year rental history, and will have your landlord(s) verify at least the last twelve months. Your lender will want a 2 year work history, but you might also need to write letters of explanation to address any gaps in employment. They will have to make sense to boot. They

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