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What kind of documentation does a typical borrower need to provide to the lender when applying for an FHA mortgage or refinance loan? There are some rules to be aware of when gathering your paperwork--do you know what they are?

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Documents You Need for Your Home Loan or Refinance Loan

May 9, 2021

Documents You Need for Your Home Loan or Refinance Loan
What kind of documentation does a typical borrower need to provide to the lender when applying for an FHA mortgage or refinance loan? There are some rules to be aware of when gathering your paperwork--do you know what they are?

Some Documentation Comes From the Borrower

Some of the information you provide to the lender must come from you directly. Those can include your identification, any proof of legal residence in the USA that may be required (you do not have to be a citizen to be approved for an FHA mortgage, but you must have documentation that shows your status as a non-resident alien, etc.

You will be required to furnish proof of your Social Security Number where applicable, and copies of other personal records may also be needed.

Your lender will need contact information for your employers, plus documents you must sign to give permission to request credit and tax information. You may also need to sign paperwork giving your lender permission to pull your credit reports.

Any down payment funds you have require documentation, too. Your lender needs to know the money does not come from unapproved sources like payday loans, pink slip loans, or down payment “gifts” that are loans in disguise.

Your lender will give you more information about the types of paperwork required directly from you, the borrower. Every financial institution will have its own requirements.
 
Some information about the borrower cannot be sourced from the borrower. There are some items that your lender needs that you cannot directly provide. What are these?

Documentation That Cannot Come From the Borrower

FHA loan rules in HUD 4000.1 state clearly that some information must not be sourced from the borrower. It’s the same sort of thing that college students have to deal with when transferring credits from another school to their current college. The college does not accept transcripts directly from the student, but instead require they be sent from the college directly to the admissions department.

In the same way, your lender is not permitted to accept certain documentation from the borrower. These include your credit reports--these must be requested by the lender and they must be sent directly to the lender from the credit reporting agency. They cannot pass through the borrower’s hands first.

The same is true of your tax documents--your lender will ask you to sign paperwork giving the bank your permission to request your tax documents on your behalf. The lender can’t accept duplicates of your personal copies of the tax record for official purposes. You may be asked to bring them in as a reference, but an official, from-the-IRS copy is a necessity when applying for a home loan.

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