FULL DOCUMENTATION (Full Doc) LOANS
A fully
documented loan is a loan in which the borrowers income and assets can
be documented, usually through pay stubs, W-2's, bank statements, or tax
returns. Below I
will list the standard documents requested, but know that your specific
situation may require more or less income documentation.
Wage Earning (Salaried & Hourly)
Employees
If you are a full time (non-commission based,
non-owner) employee and your employer collects taxes from your income,
you will likely need to provide your last two pay stubs, and your last
two years W-2's to your loan officer to document your income. Any
overtime or bonus income must be consistently earned to be used in your
qualifying income.
If you are a part-time (W-2 based) employee, then
you will need to have a two-year history of working that part-time job
for that additional income to count. This is so that a borrower
does not go out and get a second job to boost their income for their
loan application.
Commission Based Employees, Part Owners, or
Self Employed Borrowers. If more than 25% of your income is
earned by commission, or if you own more than 25% of a business that you
work for, you will need to document your income with a copy of your last
two years of tax returns as filed. All schedules must accompany
your application. For many business owners and commission based
employed, the actual amount earned is often far less than the "true"
amount earned, so borrowers in this category, often opt for other forms
of income verification, such as stated income loans, no ratio income
loans, or no documentation (no-doc) loans.