Once you feel financially prepared to take on a home mortgage, you are responsible for applying with a lender. There’s a few documents you’ll need before you get started!
First obtain your credit history. It’s less common to find errors or discrepancies in a credit report, but it’s still possible. Discovering these issues beforehand gives you the opportunity to fix them before a lender bases your mortgage on an incorrect summary.
If you have a history of late payments or a score that’s below average, you actually reduce your chances of getting the mortgage you want. Instead, try to find little ways to boost your credit beforehand. This includes paying off credit cards and saving as much as you can.
Borrowing History and Debts
Next, gather a complete assessment of your current financial situation in terms of debt. This includes credit card debt, student loans, and car loans. Other items such as child support also count!
Business owners and other individuals who have filed for bankruptcy in the past will also need to address the cause and situation behind that.
Assets and Incomes
Regular full-time employees need W-2 forms and recent paycheck stubs. A letter of employment will also confirm you have a reliable source of income. Lenders will also ask that owners of stocks, bonds, IRAs, car titles, and brokerage statements must declare them during this process.
Business owners or self-employed contract workers must put together profit and loss statements. These are usually stated in 1099 forms.
Other Financial Statements
Your personal finances includes tax returns, residential history from the last 1-2 years, and bank account statements. Cancelled rent and utilities checks prove that you pay bills on time.
Depending on whether you choose a bank, credit union, online lender or other party, each has different requirements, so be sure to do your research and gather everything you need beforehand.
Proof of Identity
Last but not least, confirm your identity! A photo government issued ID will help you prove you are who you say you are. Your valid driver’s license, social security card, or passport will come in handy when you apply.
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