I’m in the process of waiting to close on the property that I just put an offer on a couple weeks ago. For all of you that have gotten a mortgage before, you know how much of a pain in the rear it is to give the underwriters all the documents they’re looking for to approve the loan. It’s like throwing up the last 2 years of your financial life and tying it with a neat, tidy bow to be scrutinized.
As someone who invests in real estate, I’ve learned that to make my life easier, I pre-organize all my documents in one folder on my computer so that when the underwriter asks for a certain document, BAM!, I’ve got it at my fingertips. I’ve gotten lots of comments from underwriters on how EASY it is to work with me because of this. The lender notices these things and if you’re lucky enough to find a good lender with great rates that you want to work with again, having your sh*t together is impressive and rare and the lender will be more apt to work with you again (and maybe give you a better rate, you never know!).
Being organized also helps with getting the pre-approval letter that’s sometimes necessary to even offer on a property. Ideally, you’d have your pre-approval letter ready to go before offering on a property. However, the letter lasts 60-90 days before you have to go through the process again of the lender pulling your credit which blemishes your credit score in the process. So, I like to wait until I find a property that I want to offer on first, then get the letter. Having my documents all ready to go in one computer folder that I can zip off to the lender is essential to get that offer to the seller quickly.
I am very OCD when it comes to organizing my mortgage information. My system is easy… some documents are “permanent”, like tax returns, and some are “temporary,” like paystubs. For those permanent documents, set up folders and fill them with the information either before or while looking at properties. My permanent folders include:
- Voided Check– Voided checking account check
- Tax Bills– Tax bills for all properties to include rentals (this will be updated annually)
- Driver’s License– Copy of driver’s license for you and any other co-signer(s) on the loan
- Leases– Copy of all leases for all rentals (this will be updated when you get new tenants to sign new leases)
- Tax Bills– Property tax bills for all properties (updated annually)
- HOA– HOA dues for any and all properties (updated annually)
- Taxes– Taxes for the last 3 years
- W2s– W2s for the last 3 years
- AoI– Articles of Incorporation for real estate LLCs
- By Laws– By Laws for real estate LLCs
- Tax ID– Federal Tax ID # for all real estate LLCs
- Declaration Pages– Declaration Insurance pages for all properties (updated annually)
- SSN– Social security card scans for you and any other co-signer(s) on loan
- P&L Statement– If you are self-employed, a profit and loss statement for the last calendar year
My temporary folders I fill with information right before making an offer on a property since what the banks look for is current information. These include:
- Pay Stubs– Pay stubs for the last month
- Bank Statements– Current bank statements for all savings and checking accounts for the last 2 months
- Retirement Statements– Current retirement statements for all forms of retirement (IRAs, 401(k)s, etc.) for the last 2 months
- Auto Loan– Two months worth of statements for any auto loans
- Other Loans– Two months worth of statements for any other loan you may have
- Down Payment Account– Two months worth of statements from any account in which you intend to pull from for your down payment (HELOC, self directed IRA, etc.)
- Mortgage Statements– Mortgage statements for any and all properties for the last two months
- Current P&L Statement– If you are self employed, a current profit and loss statement
You will get a bank here and there that will ask for something else to round out their deep dive into your financial life but the above lists have served me well so far.
Because I’m so organized, my closings normally happen as scheduled according to the date I put in my offer. My next closing will be this Friday then it’s renovation time which is really the best part for me. More on that soon!
