5 Most Important Parts of Burbank Loan Approvals
When a bank gets your loan for approval, it gets a lot of paperwork thrown at it. With all the new lending laws, it seems like it’s impossible to get all the paperwork to the right people and on deadline. That’s why it’s so important to have a strong loan application.
Want to make yours stronger? Here are the five most important parts of a Burbank loan approval.
Your Bank Statements
Although down payments are important, what’s really important is how much is in the bank right now. If that money has been in for 60 days, it’s considered reliable. You will need to send your lender at least two bank statements of proof.
Lenders will look to verify deposits of over $500 made to your account. More than likely, they’re your salary, but your lender will follow up anyway. If you have cancelled checks, you will also need to explain those.
If you have business and personal accounts, make sure those are separated before you apply. Lenders will go through everything, so it’s your job to convince them that your finances are secure and stable.
Review of Rental Properties
If you own any rental properties, then you will need to show your lender a few other documents to secure your loan. You will need copies of any leases you have in addition to several rent checks per lease as well as the tax bill and a homeowners insurance statement.
If your tenants pay you in cash, you may run into some issues. Lenders like to have a concrete paper trail, and cash leaves no traces. Your best way to show payments is to show a record of cash deposits every month.
Your Tax Returns
Tax returns are like financial footprints. They help match up your bank accounts with what you report to the government. So long as everything matches, you should be good. For each rental property you own, you will need to submit the tax return for it. While it can be annoying to send so much paperwork, lenders can turn you down if you don’t so make sure you send everything in on time.
Plan on sending in at least two years worth of tax returns. The adjusted gross income found on your tax return will count as your annual income for the year.
The Appraisal
Perhaps the most infuriating part, the appraisal usually focuses on factors out of your control. There can sometimes be a lot of politics with who gets the appraiser out to your property and who will be in contact. Once the appraiser files a report, that report will be scrutinized to determine if the value is comps to other properties. If something goes wrong, it’ll be your job and cost to get the appraiser back out.
The Closing Costs
Good loan approvals will also deal with how closing costs are to be divvied up between sellers and buyers. You, the borrower, will receive what is called a fee worksheet, which you will verify that all your fees on the list add up to what is on the final closing paperwork. This is supposed to protect you from paying extra fees.
If the fees aren’t right, then it’ll take about three days for the fees to be sorted out.
Applying for a loan is difficult, but if you stay on top of your financials, then you’ll have an easier time getting a loan.