Some of the more common loan types and the needed paperwork

Posted at 9:23 PM, Jan. 27, 2007

Full document:  Taxes, 1099s, W2s, pay stubs, bank statements, investor statements, lease agreements.

Stated income/ verified assets:  Verify employment, ensure it is realistic to profession listed and provide bank statements and any other financials to prove assets

Stated income/ stated assets:  Just verify employment and ensure it is realistic for profession listed on the application.  No need to prove, but assets must be reasonable.

Verified income/ stated assets:  Prove income history with taxes, 1099s, W2s but do not prove assets at all.

Lite document:  Similar to Full Doc loan but instead of showing income history over 24 months, we prove just 12 months. 

No Ratio:  Verify employment but we do not lend as much weight to the income needed to support our client’s ability to pay this loan each month.  We do have to provide assets on this loan.  There is no debt to income ratio on this loan at all.

No Document:  Do not prove employment, salary, or income.  Nothing! Credit is king!

The above are the most common loans I write across the United States.  I always try to write the most aggressive loans (meaning best rates) for our clients.  However, every company and every investor has a great memory so I have to project the appropriate amount of foresight so I do not limit our client’s ability to secure future loans. 

For example, if I wrote a loan as a full document today and then 6 months later we wanted to write a stated income loan, the underwriter would most likely not permit this.  Even if the underwriter somehow let it through, the investor always reserves the right to come back after the loan officer and/or client for anything they feel is a misrepresentation or that could put the loan and the investor’s financial health at risk.

Here’s the rule: The less information we provide to the investor, the higher the rates will be for the client.

 Andrew Hoelzel, Meridas Capital - 702-938-7734