At 616 REALTY, we know that applying for a mortgage can be a time-consuming process, but knowing the process and gradually gathering all the materials you need, will make it less overwhelming! Of course, the mortgage lender needs first and foremost, a thorough understanding of your income. This will help you to get a pre-approval letter.
Below is a list of the most commonly used documents you will need in order to get pre-approved and help mortgage lenders assess risk.
Credit report
They will first access your credit history. Any blemishes like bills that went into collections may impact your credit score and send up red flags to a lender. It can be helpful to provide a letter explaining any problems with your credit report. Your interest rate and approval will be impacted by your credit score, so it is important to get your credit in as good of shape as possible before you apply.
Pay stubs
In order for the lender to get a clear picture of how much money you are making and your ability to make your loan payments, it is best to have a collection of your most recent pay stubs, 3-6 would be ideal, but at minimum, the last couple. They really want to get an idea of your short term financial situation.
Bank statements
It is also a good idea to bring with you a year’s worth of bank statements. These will help the potential lender evaluate your long-term financial stability and your ability to repay your loan.
Taxes
In addition, your last couple years of W-2’s and tax returns will be needed to determine the home loan amount that is right for you. This, with the other documents, helps give the lender a 360 degree view of your finances. If you are self-employed, you will want to have your 1099 forms that show profit and loss.
Proof of rental history
Providing lenders with proof of rental history and consistent payments, if applicable, would be helpful in getting your loan approval. Gather paper copies of your history to include in your application.
ID
A photocopy of your ID will be needed. If you have two forms of identification, it is a good idea to make a copy of both. Also, if you are getting a joint mortgage with a significant other, they will need all the information from both of you.
Additional income proof
If you have additional income that you rely on, it is important to provide physical proof, like hardcopies of checks for things like alimony, child support, dividends, you name it, the more, the better.
Assets
A sheet with assets can work in your favor as well. Providing retirement accounts, savings account balances etcetera will be necessary. If you plan to utilize funds from an investment account for your down payment, you should provide proof of funds.
Once you have all your paperwork gathered and in order, getting a referral for a reputable lender from your 616 REALTY agent would be a great first step. We have a pulse on which mortgage lenders are best for different clients with different loan needs whether it is a VA loan or a traditional loan.
We are here to help you with all your mortgage questions, so contact us today.