*disclaimer: Not all individuals will qualify for each loan type and/or scenario. Please contact me to see if you'd qualify for these loan products and/or discuss your options.
One of the many things a borrower might be asked for in their loan process is proof of assets and income. What does this mean? Why do loan officer's need this type of information?
Proof of assets means proof that you can make your down payment and monthly payments. This will come in the form of Personal and/or business bank statements, stock accounts, verification of employment and other verifiable documents that a borrower has the funds available to use on their home.
Loan officers and lenders need this documentation to make sure that borrowers aren't putting themselves in a bad financial position. They'll verify that a borrower can afford the homes that they are looking to purchase and make sure that they have the funds available for a down payment.
Before 2008, borrowers could do loans called NINA and SISA. NINA stands for No Income No Assets, and SISA stands for Stated Income, Stated Assets. These types of loans were exactly what they sound like. Borrowers could either state their income or have no income documentation and still get a loan. After these types of loans heavily influenced the great recession of 2008, they became nearly extinct in the mortgage world.
Nowadays, borrowers are required to have a proof of assets and income available so that we don't repeat history. This is why loan officers will reach out to a borrower's company's HR department to get a verification of employment, or reach out to the borrower to get a few months of bank statements.
There is no need to get a borrower into a home that they could potentially foreclose on. If a borrower can live comfortably in their new home without the stress of an unaffordable monthly payment looming overhead, then lenders are happy.
For more information on proof of assets and income, please feel free to reach out! I'd love to walk you through the importance of them and why loan officers are adamant about verifying a borrower's funds before lending money to them.
*disclaimer: Not all individuals will qualify for each loan type and/or scenario. Please contact me to see if you'd qualify for these loan products and/or discuss your options.
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