In our previous blog, we talked about different flavors for some popular loans. This week we are putting the FHA Loan in the Palm State spotlight.
Sometimes borrowers are shocked that they need to provide tax papers to their lenders when they fill out their applications. Some clients even want assurance this is legal.
Palm State Mortgage Company assures you this procedure is legal. In fact is often required, especially when you are applying for a FHA Home Loan. This is the focus of our spotlight in this week’s blog.
Your lenders will be particularly interested in your tax documents, if you are the owner of a small business. This is simply part of the process.
Your broker or loan officer must follow certain rules. HUD rule 4155.1 dictates, “All borrowers, including United States (U.S.) citizens, must have a valid Social Security Number (SSN) and must provide evidence of that SSN to the lender.” Your income tax records are an excellent way to verify and document your Social Security Number.
HUD 4155.1 Chapter One Section B states several requirements, which your broker or loan officer must document:
1. The SSN for each borrower, co-borrower, or co-signer on the mortgage must be verified.
2. The numbers must be validated, either through entering the borrower’s name, date of birth and SSN in the proper electronic screen through the FHA Connection (FHAC) or its equivalent connection.
3. A full examination of the borrower’s pay stubs, W-2 forms and valid tax returns must be conducted. These can be obtained directly from the Internal Revenue Service (IRS) for the FHA
4. There must be a service provider with direct access to the Social Security Administration (SSA), if there are any inconsistencies or multiple Social Security Numbers involved for the borrowing persons.
5. Even when the SSN’s is established, the borrower might have to submit tax records and other business documentation if he or she is self-employed.
6. As with any legal paperwork, the FHA expects you to submit copies of data, not originals. Keep them secure.
The paperwork for a FHA loan, or any type of loan, is not as complicated as it seems. It is meticulous, and it has very specific rules for lenders, for brokers and for loan officers.
The borrower must help everyone else to follow their rules.
Sometimes borrowers must be tolerant, and realize this is not “busy work.” It is part of the essential process of obtaining your piece of the American Dream as a homeowner.
There is an old saying that you can “eat an elephant, one bite at a time.”
So, do not worry, although you might have to strain your patience a little, Palm State Mortgage Company will help you fulfill the application process, for FHA, or any type of loan, “one bite at a time.”
Thank you for reading the Palm State Mortgage Blog this week! Now you know how advantageous it is to maintain good records of your taxes and other personal papers.
