Applying for a mortgage can be a confusing and complicated process, especially for first-time homebuyers that have not gone through the experience before. But it should not be, equipped with the knowledge of the paperwork you should have in hand, and with the guidance of an experienced loan officer, the process of applying for a mortgage loan can be quick and simple.
Here is a list of what you will need when you are ready to apply for a mortgage loan.
The first thing that a lender will have to review to approve you as a borrower is your credit report. Your lender will be able to retrieve this document for you, so you do not have to present it. However, it is important that you are aware of your credit score. In case your credit score is low your loan officer will be able to work with you to improve it or to choose the best mortgage option available for you at that time. Usually, a credit score of 620 or higher is necessary for a conventional mortgage loan.
You will need to present personal identification documents, a copy of your driver’s license, your Social Security Number, and your signature. With these documents, your mortgage lender will be able to review your credit report in order to determine your mortgage loan eligibility.
Proof of Income
Proof of income from all income sources will be required. You will need to present W-2 forms from the past two years and pay stubs from the last 30 days, these will confirm that you have a steady and stable income. Any other additional income such as alimony, child support, or bonuses will also have to be presented. For those that are self-employed and/or receive rental income, you will still need to present proof of income. In case there are any periods of time within the past two years in which you did not have income, you might be required to present a written explanation.
Bank Statements and Assets
Your mortgage lender will ask to see two to three months of bank and investment account statements. This is necessary to verify that you have a good amount of savings to pay for your mortgage in case of any emergency, and the funds necessary for the down payment. In case there are any large deposits of funds, you might be required to provide documentation explaining their source.
Rental History Report
For the first-time homebuyers or those with limited credit history, often lenders will ask for other proof that you will be able to pay your mortgage on time. This proof can be rent checks, or they may request your landlord’s contact information so that they can provide documentation proving that you have made your payments on time for the past twelve months.
For those lucky to be receiving help from family or friends, you will need to provide written proof that this money is a gift and not a loan. This documentation needs to explain the individual’s relationship to you and how much money they will be contributing to your home purchase.
Now you know the main documents that you will need to provide when you apply for a mortgage loan! Our Loan Officers are always available to assist you with any questions, do not hesitate to reach out!