Data Management and Your Home Mortgage
Stay ‘til the end for a checklist!
Tax season is funny, isn’t it?
You go in for your appointment with your accountant and they start asking you about how much you made, received, spent, and gave away last year.
And then you realize you didn’t keep track of anything that could get you an extra little tax break.
You swear to yourself, “I’m saving all my receipts and writing everything down this year, dagnabit!”
And yet, when next year rolls around you realize you didn’t save any receipts once again.
The mortgage process is NOTHING like that.
Documentation isn’t the icing on the cake – it is the cake.
You don’t get a loan without it*.
*It meaning your info and data: documents, statements, IDs, and all the other things that verify the facts of your current situation.
The mortgage journey goes a bit like this:
Pre-approval
House Hunting
Official Loan Application
Loan Processing
Underwriting
Loan Approval
Closing
Managing your data well is the SINGLE most impactful way you can ensure a smooth mortgage journey from pre-approval all the way to closing.
You’re in luck because we’re going to tell you how to do it.
1 - Know What Data You Need
This may vary depending on the specific requirements of your lender and the type of loan you are interested in.
Your licensed & local lender can tell you exactly what data to collect and submit for your specific situation.
But for the most part, here are the necessities:
W-2s
Current Income proof
Valid Personal Identification
Asset Statements (including bank account, retirement, CashApp, Venmo, Zelle, etc.)
Different lenders have varying policies about what data is required. The type of loan also determines the specific criteria.
Your licensed & local lender will let you know exactly what they need from you.
2 - Know Your Role(s)
As a homebuyer, you have two main roles and responsibilities during the mortgage process: 1 - provide all the documentation, 2- be responsive.
Holes and inconsistency in your data disrupt the entire process.
And makes us have to call you over and over again.
Not that we don’t enjoy talking to you, we just know how frustrating it is to take one step forward and two steps back.
You need to provide the data and stay available for any questions that come up and provide updates along the way.
Unfortunately, we cannot get your data for you — only you can do that.
If you have a bank account — you have access to your statements (just not on the ‘app’).
If you’re employed — you have access to your pay stubs and W-2s.
If you filed taxes — you have access to your returns.
Of course, we can guide you on how to obtain these if we need to.
3 - Share Documents With Your Lender
To give you a place to start, besides looking in the couch cushions and behind the stove, you might have luck with these common forms:
Bank Statements - Online banking, paper statements filed away, or if all else fails, call the bank and request they provide the most recent statements for you.
Identification - Drivers License, Passport, or VISA in your wallet or purse (we only need the front!), your social security card might be the same or in a lock box at home or the bank.
Federal Tax Returns - (state returns not needed) Your CPA or online tax system may keep records for you. You may have downloaded them to your computer after they were complete or they could be printed and in your filing cabinet.
Worst case, you can get them directly from the IRS (hint: it's fairly easy, but another step).
W-2s & 1099s - Locate all the documents you provided to your CPA, they should be included. They are NOT typically part of your actual tax returns. There could be a different version in there)
Contact your employer! They have to keep records for several years, so they should be able to provide you with a copy! You can contact your CPA, if applicable.
Or, if all else fails, you can get them directly from the IRS (hint: it's fairly easy, but another step ).
Paystubs: Company intranet, email, mailed stubs filed away. You can always contact your HR department to get copies of the most recent 30 days worth (4 weekly, 2 bi-weekly, 2 semi-monthly, 1 monthly).
Retirement and Disability Award Letter: You should have received this once you first started receiving this income type and if you’ve been receiving it for more than a year, you should receive annual updates.
For Social Security, you can find the award letter online by using this link.
4 - Keep It Current
Just picture it: You’re driving along the scenic route to home ownership.
Real Sunday cruise vibes, everything’s going smoothly and you’re belting out that Celine Dion song you wouldn’t dare sing in front of your friends.
You’re looking out at the pastures and the mountains, enjoying the breeze through the windows.
“Baby, baby, BABY when you t–”
BAM!
You hit a deep pothole; your glasses fall off and slide right between your feet.
The tires sing their own song, “flap, flap, flap”.
Your easy-breezy Sunday drive comes to a sudden halt.
Your outdated information does the same to your mortgage journey.
To avoid this:
Keep your tax returns, your W-2s, change of address, history of assets, and debt repayment documents.
Make sure you give your current address and every address from the past few years.
No gaps.
The IRS requires you to keep things for 7 years… the mortgage process isn’t as stringent but still.
Don’t go too Marie Kondo on your filing cabinet.
Inconsistent data impacts your stress and the mortgage journey.
If you submit information and we can’t verify it, we have to request the new and updated data and start the verification process over.
This is called a verification loop.
It’s like phone tag, but probably much more annoying for you.
If you don’t want us to bother you any more than necessary during your mortgage journey — make sure your information is accurate and up-to-date from the get-go.
5 - Don’t play dumb
Sometimes when we get caught breaking a rule, we pull the I-had-no-idea card to avoid trouble.
“I thought the speed limit was 65.”
“I had no clue that lunch in the fridge was yours.”
“I have no idea how that got there…”
That doesn’t work when it comes to your personal information.
Ignoring anything in your data, or leaving anything out, isn’t going to help .
We’ll need to know about any and every big or inconsistent deposit or withdrawal.
If your old college roommate helped you write a cover letter and you Venmo them a hundred bucks with the public note “Dog fight winnings” for an attempt at humor…
Be ready to explain it to your mortgage lender.
Venmo and CashApp allow bill pay and we’ll have to see those statements.
If you love an action list – this next part is for you.
How do you make sure all your data is up to date?
Make a checklist of all the information your lender needs and get both the latest and (if required) prior documents as well.
Organize your financial records in a digital file for easy access.
If security is important to you, you can store the digital file in a password-protected folder or a cloud storage platform.
Periodically review and update your financial information.
Make sure your personal information is consistent and up-to-date.
Tell your lender if any of your contact information changes.
Or, if you’re a newlywed, for example, and in the process of changing your last name, let your lender know.
Make sure to let your lender know if you have a change in income or employment status, or if there are any changes to your assets, liabilities, or credit profile.
Communicate with your lender. Ask questions about anything you’re concerned about.
A good lender will lay out everything they need from you and can guide you through how to obtain it if necessary.
Ensuring that all your data is up to date and ready for submission to your mortgage lender is not “cool to have” or “greatly appreciated.”
It's a fundamental requirement for financing your next home.
By having a good idea of the required data, organizing and maintaining your financial records, and establishing open communication with your licensed & local lender, you can stroll through your home-buying journey with confidence.
Remember — a smooth and simple mortgage journey depends on the accuracy, completeness, and timeliness of your information. (*Cough**Cough* your data management.)
So, roll up your sleeves, crack your knuckles, and contact us today!
We can help you get a leg up on your data management and make your homeowner dreams a reality.