What Documentation Do I Need To Get Pre-Approved For A Home Loan?

    What Documentation Do I Need To Get Pre-Approved For A Home Loan?

    Home Buying

    November 19 2018

    Getting pre-approved for a mortgage does always help to put yourself ahead of competition among other buyers when looking to buy a new home, as it proves that you can afford buying the property in the first place.

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    What do we need to get pre-approved? We have to verify our income, employment, assets and debts. Depending in different factors, such as if you are self-employed, or if your income is coming from different sources, you may need to give more documents to your lender.

    Let’s take a look at what documents we need to hand to our lender to get pre-approved for a mortgage:

    1. Income and employment: You need to show how you make your money, if you’re working under only one contract this process will be much easier.

    *W-2 wage earners: Copies of W-2 forms and your two most recent payroll stubs. If income includes overtime, bonuses or differential pay, you may need your most recent end-of-year payroll stub.

    *Self-employed,freelancers and independent contractors: they would need to proportionate a year-to-date profit and loss statement and two years of records, including the Form 1099s

    *Real state income: if you want to use this to apply for a mortgage, you need to give the documents related to the rental income, address of the property,lease and the property’s current market value.

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    2. Tax returns: you will be asked to share the two most recent copies of federal and state returns

    3. Assets:

    • Bank statements: copy 60 days’ worth of statements of all the accounts you’d use as assets to qualify for a mortgage(even the blank pages)
    • Retirement and brokerage accounts: two months’ worth of statements from IRAs,investment accounts and CDs, plus the last quarterly statement from 401(k), which shows the vested balance. Don’t forget to include all the pages!

    4. Debts

    • Monthly debt payments: include all of them,with each creditor’s name and address and your account number, loan balance and minimum payment amount.
    • Real estate debt: If your current property is mortgaged, make sure you have your most recent statement — showing the loan number, monthly payment, loan balance and the lender’s name and address — and the declaration page of the insurance policy.

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    5. Other documents you may need(some depending on your situation):

    • 30 days of paystubs
    • Schedule K-1 (Form 1065) for self-employed borrowers
    • asset account statements (retirement savings, stocks, bonds, mutual funds, etc.)
    • driver’s license or U.S. passport
    • divorce papers (to use alimony or child support as qualifying income)
    • gift letter (if funding your down payment with a financial gift from a relative)

    So that’s all for today, hope you found this article useful so far and don’t hesitate in reaching me out if you have any questions or need a consultation.

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