Now that tax day has come and gone and spring time is upon us, many people start thinking about becoming homeowners or about moving to a newer or bigger house. Before you start hitting the Open House circuit, get yourself pre-approved for a mortgage. Here is a quick list of the documents you will need to provide:
Basic Personal Information: Full legal name, social security #’s, driver’s licenses. The lender needs to verify you are who you say you are. If you feel uncomfortable giving your social security number in writing or email, your mortgage broker should be okay with you verbally providing it over the phone or in person instead of in writing.
W-2’s, Paystubs & Other Sources of Income: The lender needs to know where you get your money from, how often and how much. They need to confirm you have some sort of regular income that will be available to pay your monthly mortgage payment. If you receive alimony, social security, or any other sources you should also include these.
Two Years of Income Tax Returns: The lender also wants to verify that your income has generally been stable amount. If you are self-employed or run a small business, this can stand in for your paystubs as well.
Information on Other Debts: Monthly payment amounts on credit cards, loans (student, auto, personal), other mortgages, and medical bills. Lender needs to know about other regularly occurring expenses. Along with your monthly income, the lender uses this information to determine how much you can borrow, along with what is an appropriate monthly payment.
Bank Statements: The lender needs to see you have access to the cash required for a down payment.
Statements on other Assets (stock, other real estate property) and Retirement Accounts (IRA’s): If you have any of these, it is to your advantage to let them know. They can get a sense of your current net worth to see if it makes sense for you to add a mortgage. Also, if you are intending to pull money from a retirement account or sell stock in order to make downpayment, they will need proof of those funds.
If you have filed bankruptcy or foreclosure, its better to tell your lender about these things earlier rather than later. Don’t assume that because you have had these somewhere in your past, that it will prevent you from getting a loan.