Morgage Documentation Types - Find Out Which Documentation Type Fits You
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Income Documentation includes recent paystubs (showing Year to Date earnings), W-2's or 1099's, Tax Returns and Bank Statements. It also includes Social Security, Pension, Retirement, Child Support and Alimony Award Letters. Asset Verification involves recent statements of all liquid assets such as 401K, IRA, Checking, Savings, Mutual Fund and related accounts. There are a variety of programs for people that prefer to not disclose this personal information.
The following is a list of situations and the appropriate Morgage Documentation Type for that particular situation.
1. If you can provide Income Documentation such as Paystubs, W-2's or 1099's, Tax Returns or various types of Award Letters and if you can also prove your assets through recent Statements...then you should utilize a Full Documentation Morgage
2. If you can prove assets with Statements but your Income Documentation is only supported by Bank Statements...then you would use what is referred to as a Lite Doc or Limited Documentation Program. Employment status is executed with a 'Verification of Employment' and Self-Employed borrowers must provide a business license or a CPA letter stating that Self Employment taxes have been filed for the previous 2 years.
3. If you can prove assets with Statements but you do not want to support your income by way of standard Income Documentation...then you should use a Stated Income Verified Assets program (This option is common for business owners, Commissioned Workers and others whose Income Documentation might not reflect their real and total income). Basically, the souce of your income will be verified but the amoun of your income will not be verified. Employment status is executed with a 'Verification of Employment' and Self-Employed borrowers must provide a business license or a CPA letter stating that Self Employment taxes have been filed for the previous 2 years.
4. If you decline to have the dollar amount of your assets verified and you do not want to validate your income by standard Income Documentation...then you want to use a Stated Income Stated Asset program. The source of your income and assets will be verified but the amounts will not be verified. Employment status is executed with a 'Verification of Employment' and Self-Employed borrowers must provide a business license or a CPA letter stating that Self Employment taxes have been filed for the previous 2 years.
5. NIVA - This is an option for those that might be considering the Stated Income Verified Assets program. The difference between NIVA and SIVA is that when you 'State Your Income' it needs to be in line with your occupation (For example, no one will believe that a janitor is making $95,000 per year). So the NIVA option is for those who can't state an income that is in line with their occupation but still statements to support their assets. Your employment will be verified but the income information will no be reported.
6. Some lenders refer to NIVA programs as 'No Ratio' programs...so if the NIVA program sounds right for you then you can request either a 'NIVA' or 'No Ratio' option.
7. If you can prove employment but can not (or do not want to) provide Income or Asset documentation the the correct Documentation Type for you is the No Income No Asset program.
8. If you can not prove employment or provide income and asset documentation then the right program for you is the 'No Doc' morgage.
"To say that I appreciate you and your company's help would be a huge understatement..."
Common Morgage Documentation Types
The documentation necessary to process a loan falls into two general categories: Income Documentation and Asset Documentation.Income Documentation includes recent paystubs (showing Year to Date earnings), W-2's or 1099's, Tax Returns and Bank Statements. It also includes Social Security, Pension, Retirement, Child Support and Alimony Award Letters. Asset Verification involves recent statements of all liquid assets such as 401K, IRA, Checking, Savings, Mutual Fund and related accounts. There are a variety of programs for people that prefer to not disclose this personal information.
The following is a list of situations and the appropriate Morgage Documentation Type for that particular situation.
1. If you can provide Income Documentation such as Paystubs, W-2's or 1099's, Tax Returns or various types of Award Letters and if you can also prove your assets through recent Statements...then you should utilize a Full Documentation Morgage
2. If you can prove assets with Statements but your Income Documentation is only supported by Bank Statements...then you would use what is referred to as a Lite Doc or Limited Documentation Program. Employment status is executed with a 'Verification of Employment' and Self-Employed borrowers must provide a business license or a CPA letter stating that Self Employment taxes have been filed for the previous 2 years.
3. If you can prove assets with Statements but you do not want to support your income by way of standard Income Documentation...then you should use a Stated Income Verified Assets program (This option is common for business owners, Commissioned Workers and others whose Income Documentation might not reflect their real and total income). Basically, the souce of your income will be verified but the amoun of your income will not be verified. Employment status is executed with a 'Verification of Employment' and Self-Employed borrowers must provide a business license or a CPA letter stating that Self Employment taxes have been filed for the previous 2 years.
4. If you decline to have the dollar amount of your assets verified and you do not want to validate your income by standard Income Documentation...then you want to use a Stated Income Stated Asset program. The source of your income and assets will be verified but the amounts will not be verified. Employment status is executed with a 'Verification of Employment' and Self-Employed borrowers must provide a business license or a CPA letter stating that Self Employment taxes have been filed for the previous 2 years.
5. NIVA - This is an option for those that might be considering the Stated Income Verified Assets program. The difference between NIVA and SIVA is that when you 'State Your Income' it needs to be in line with your occupation (For example, no one will believe that a janitor is making $95,000 per year). So the NIVA option is for those who can't state an income that is in line with their occupation but still statements to support their assets. Your employment will be verified but the income information will no be reported.
6. Some lenders refer to NIVA programs as 'No Ratio' programs...so if the NIVA program sounds right for you then you can request either a 'NIVA' or 'No Ratio' option.
7. If you can prove employment but can not (or do not want to) provide Income or Asset documentation the the correct Documentation Type for you is the No Income No Asset program.
8. If you can not prove employment or provide income and asset documentation then the right program for you is the 'No Doc' morgage.