Getting Started: Owner Finance Application Checklist and FAQs
Owner Finance Application Checklist
In order to complete an application for owner financing, you will need to gather and submit a few documents.
If you are employed by a company, you will need to submit:
- A copy of your most recent pay stub
- A copy of your W2s from the 2 previous years for ALL jobs, or tax returns from the previous 2 years
- A homeowner’s insurance quote for the property you are planning to purchase
- If you currently rent, verification of rent from your landlord
- If you currently own a property, a statement saying what you plan to do with your current house (i.e. sell it, keep it as primary or secondary residence, or rent it out)
If you are self-employed, you will need to submit:
- 2 years of your federal tax returns OR 12 months of business bank statements
- A homeowner’s insurance quote for the property you are planning to purchase
- If you currently rent, verification of rent from your landlord
- If you currently own a property, a statement saying what you plan to do with your current house (i.e. sell it, keep it as primary or secondary residence, or rent it out)
If you receive benefits or are retired, you will need to submit:
- A copy of your award letter
- A homeowner’s insurance quote for the property you are planning to purchase
- If you currently rent, verification of rent from your landlord
- If you currently own a property, a statement saying what you plan to do with your current house (i.e. sell it, keep it as primary or secondary residence, or rent it out)
In addition to the items above, if you have a lower score (below 620) or if you don’t have any loans at this time, you will also need to submit two (2) letters of credit that shows a 12-month payment history with no 30-day late payments. Letters of credit can be from any of the following:
- Gym membership
- Hulu
- Netflix
- Life insurance
- Daycare
- Landscaping
- Auto insurance
- Electric
- Water
- Cable
- Cell phone
- Alarm
- Exterminator
- Trash/sewer
- Buy Here/Pay here (auto, jewelry, furniture)
- Dental Plan
- Doctor payment plan for services
AND/OR
Buyer to obtain signed, dated letter from current landlord to confirm the following:
- Amount of monthly rent
- No 30-day late payments in last 12 months
- Name and phone number of landlord must be reflected
Frequently Asked Questions
Question: When I submit some paperwork, how long can I expect until a loan processor gets back to me?
Answer: Someone will try to get back to you within 24-48 hours, however, it can take up to 72 hours for someone to get back to you
Question: What should the verification of rent look like?
Answer: The verification of rent can be a signed, dated letter from your current landlord that confirms the following:
- The current amount of monthly rent
- No 30-day late payments in the last 12 months
- The name and phone number of landlord must be reflected in the letter
Question: I don’t have two years of W-2s for all of my jobs. What can I submit instead?
Answer: You can provide tax returns from the IRS instead. To do this, go to https://www.irs.gov/individuals/get-transcript and request your transcript either online or by mail.
Question: From the time I submit my application, when can I expect to sign papers on my new house if approved?
Answer: It will take at least 30 days (minimum).
Question: I have a credit score in the lower range. Will this prevent me from being approved for the loan?
Answer: Your credit score alone will not stop you from being approved. The loan officer will look at other factors as well, such as your overall ability to repay the loan.
Question: Can unemployment income be used toward my verification of income on my application?
Answer: Unfortunately, unemployment income generally cannot be counted towards income in your application. The exception would be jobs with consistent seasonal unemployment such as construction, contractors, seasonal employment, etc.
