There is a lot of paperwork involved in applying for a mortgage. However, with proper preparation you will save yourself a lot of time and frustration. When you are prepared for the process of applying for a mortgage, you allow your mortgage professional to focus on the most important aspect of this transaction which is getting you the best price and rate. Here is a list of the necessary documents you will need:
- Income/Employment Records: You will need last 2 years of W2 statements and at least one to two months of pay stubs. They may also ask for last 2 years of tax returns. If you are self-employed, you will definitely need last two years of tax returns. You should also have the name and phone number of the Human Resources professional at your job to verify employment.
- Most recent addresses: You will need to provide a list of all the places you have lived with in the last two – five years with names and phone numbers of landlords (if applicable).
- Bank Statements: You will need to show at least 3 – 6 months of bank statements. This is your proof that you have the money for the down payment, closing costs and earnest money. The lender is also looking for proof that this is your money and that it has been your money for at least the last 90 days. They are also checking on how much money you spend compared to how much you earn. Basically, they want to see if you can afford to pay them back.
- Identification: You will need to provide a copy of your state issued identification to prove who you are.
- Social Security Number: Have a copy of the Social Security Card available or at least the number for all applicants. This is needed to run your credit.
- List of debts: You should include, car loans, student loans, credit cards basically any outstanding debt that you owe. You should make sure you have account numbers, balances and your monthly payment amounts. You should also have a list of the utilities that you currently pay such as cable, gas, electric, telephone etc.
- List of assets: You should provide the most recent statement for IRA, 401k, and stocks. The lender is looking for proof that you have the reserves to make your payments should you suddenly lose your job and that you have the cash available in order to conduct the closing.
- Child support Agreement (if applicable): If you would like to include child support payments you receive to boost your income to qualify for the loan, be sure to have all documentation for that.
- Gift Letter: If you have someone who is helping you with the down payment, you will need a letter from them stating that the money is a gift and does not need to be repaid.
- Credit Report Explanations: If there are any questionable items on your credit report, you should have a written statement ready to provide to explain such as missed/late payments, charge-offs, bankruptcy/foreclosures.
There you have it. If you have all of this information when you go to apply for a mortgage, your broker will be happy and your process will go a lot smoother and faster. Having these items together before your first meeting will save you and your mortgage professional the time of chasing these down later.