10 Documents to Have Ready Before You Buy a Home

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Mortgage application with approved stamp on it after lender has received all docs and approved home buyerAs a first-time home buyer (or a more experienced buyer!), it’s fun to look at houses online.  It’s fun to watch TV shows about buying homes.  Both options make buying a home look easy (and it can be if you have the right real estate agent in your corner) but the shows and websites tend not to delve into one of the most complicated part of the process: applying for a mortgage.

One of the hardest parts of applying for a home mortgage can be collecting and supplying the document your lender requires for the application process.  Here are 10 documents to start compiling as you start the process that leads to home ownership. (Be aware too, that some lenders may ask for more or less documentation depending on your situation.)

W-2’s

Most mortgage lenders ask for your most recent W-2’s, though some may ask for two or more years worth.  Ask your mortgage lender on the phone for the exact amount so you can expedite the process.

Pay stubs

Another common proof of income your mortgage lender may request is recent pay stubs.  This is especially common if you have been at your job for less than a year.  Your mortgage lender may also require your human resources department fill out a form for verification of employment.

Business profit and loss statements or 1099

If you do freelance work or own your business, your mortgage lender is going to ask for your business and profit loss statements or 1099’s stemming from your work.

Bank statements

Your mortgage lender is going to ask for documents that detail your assets.  One of those documents is bank statements with your available balances.

Tax returns (1-3 years)

Tax returns are a common request from mortgage lenders; some lenders also have you sign a form so they can request a copy direct from the IRS.  They use the two documents to verify that you have supplied the correct information and to get a full picture of your financial situation.

Investment statements

If you have any mutual funds, CDs, stocks, bonds, or other investment accounts, your mortgage lender is going to require investment statements the verify the balances.

Titles (automobile,real estate, etc.)

Your automobile and real estate titles are an important part of giving your mortgage lender a complete list of assets you own and any recent liens.  Some lenders may not require this information; ask your mortgage lender if you need to provide titles.

Canceled rent checks (or proof of payment from landlord)

Past residency is another question that needs to be answered.  Depending on your specific situation, your lender may ask for the name of your landlord, address for the past two years, and for canceled rent checks if you were a tenant.

Gift documentation (if part or all of your down payment was gifted)

If part or all of your down payment is going to be gifted from a friend or family member, your mortgage lender needs proof of the gift.  This documentation may include an account statement and letter from the individual giving the gift.

List of debts

Your mortgage lender may be able to get this from your credit report.  You may have to supply new loans or additional information in a list.  Include any student loans, alimony, child support, credit cards, or other debts along with the creditor name and contact information (including address).

If you have any questions, ask your lender.  Once you are approved (or during the approval process), your real estate agent can help you find your home and go from mortgage applicant to new home owner.

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