In Mortgage dictionary.what is Full doc?
Answer:
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full documents
Full Doc is when your willing to show your tax returns, pay stubs, bank accounts, etc. The more you show the lender, the less risk you become to them and in return, you'll qualify for the lowest rate.
2 years of w2's with current paystubs within 45 days. You are also required to show at least 2 months of PITI( mortgage payments) in the bank
it means full documentation. this term is used to describe a loan when a person provides bank statements, w-2's, and various other documents to prove that they are trustworthy and capable of paying the loan back.
Full documentation is proving you make enough money to justify the loan according to lenders guidelines. Not necessarily every penny you make, just enough income to justify the loan given your other debts and cost of housing. The usual criterion is the debt to income ratio. Article here to explain it
http://www.danmelson.com/posts/114746549.
Learn to Calculate whether you will qualify here:
http://www.danmelson.com/posts/114746492.
Proving your income may vary in other countries. Here in the United States, it's either copies of tax returns filed with the IRS or w-2s for salaried employees. Do not confuse it with the lite doc or EZ doc programs offered by subprime lenders using bank statements. That is an entirely different can of worms, as any loan officer who's put a few through can attest.
FULL DOC - Your (1) Income, (2) Employment, (3) Liquid Assets are all verifiable through supporting documents that will "back-up" all the information you wrote on your application. Your application and the supporting documents must match. FULL DOC borrowers have lower risk, therefore - will qualify for a lower interest rate, because lenders don't have to adjust the rate pricing with risk-mitigating factors. To make it simple: you're an open book and all your cards are laid out on the table.
A full doc loan is when you can verify all your income, assets for 2 years or more with third party verification, such as W-2, pay stubs, 6-12 months bank statements, statements verifying 401k plans as well as stocks and bonds and all other assets, liguid or other wise.
Your debt ratio fits within established underwriter guidelines for both your front and back end, normally around 28/32.
I hope this has been of some use to you, good luck.
"FIGHT ON"
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