Documentation, commonly referred to as docs, are the sources that confirm borrower(s) actually have what they claim. You can generally break documentation into two distinct categories: initial docs and conditions. Think of it like a risk ladder—different loan types sit in different buckets, and each bucket has its own documentation requirements. On this page, we focus on classic products, which typically require the most documentation.
Common Issues w/ Documentation:
Transaction History
Bank Statements
Sourcing Funds
Initial Docs
Initial docs for a traditional loan depend on whether a borrower is self-employed or not.
Traditional Employment (W2)
Last 30 days worth of paystubs.
Last 2yrs of W2s
Self-employed (1099)
Last 2yrs [filed] tax returns (ALL schedules, forms, and pages)
Only 1yr required if we can prove you’ve been in business >5yrs
Conditions
Conditions are what we call the documents, tasks, and/or reports an underwriting team needs in order to certify a loan has met the requirements for final loan approval.
This is often where loans fall apart. Issues that may have been overlooked or ignored (e.g. insufficient income, undisclosed debts, etc) inevitably surface here. Each loan product has its own checklist of requirements that must be met for an UW to approve it. Some products, like private money or DSCR loans, allow for more flexibility on these checklists, while those with the lowest rates are outrageously strict. The strictness is by design; lower interest rates reflect reduced risk for the lender. When all conditions are met, the lender's risk decreases, enabling them to offer better rates.
Furthermore, if enough loans meet a set of standardized checkboxes, a market can be created to benefit both lenders AND borrowers.
A few conditions like appraisal & HOI are standard practice, but the point of using a catch-all term like “conditions” is because these needs are unique to a borrower’s file, circumstances, and property.
For specific information on common conditions and documentation needs, see this page.
Once we’ve gathered what the bank has asked for, we’ll “resubmit” the loan to the underwriting team and I’ll hop on the phone with them. In some cases, the UWs will need more info or written clarification on what we submitted. This game can have several rounds of back and forth, but if any more than 2 rounds occur, we’re doing something wrong (and we probably know it).
Common Struggles
Some conditions have a reputation for being incredibly frustrating. This section attempts to shed light on why this is the case and how to do it right.
Transaction History (“Txn History”)