Is it time to apply for a mortgage? This is an exciting time! Whether this is your first mortgage or you’ve lived in several different homes. One thing that is so critical is to give your mortgage lender the proper paperwork. Because without this, they will be unable to make an accurate determination that you are eligible. It is your responsibility and also to your complete advantage to supply them with this.
Getting this paperwork prepared means that you are ready to apply. Some mortgage lenders will offer special low rates or other deals that you won’t want to miss out on. If you’ve already got your paperwork ready to go, then you can easily apply. Most who’ve applied for a mortgage will tell you with a knowing look that pulling all of this together can take at least a couple of weeks.
Don’t miss out on this opportunity. To help you in this process, we’ve created a checklist of the 5 most critical documents that you’ll need to get a mortgage. Here’s what you’re going to want to give any lender:
Credit score and report. This is one of the most important things that your mortgage lender will request from you. Because this shows your previous history of borrowing money and how well you have paid it back. Quite frankly, if it has taken you a long time and lots of missed payments to pay back $10K then they may be highly concerned about lending you $100K. This is just simple common sense. Because lending someone money is mostly a judgement call and it is based a lot upon trusting the individual or couple. So by looking at your credit score and report, they will learn a lot about how you’ve handled money over time. Do your best to improve this so you can put your very best foot forward.
Proof of rent payments for 12 months. Of all the documents that you hand them, this one matters the most to a lot of them. Because they are seeing how much you value paying for a home. Even if your credit score is lower but you’ve never missed a rent payment, then this will work greatly in your favor. So keep that in mind when you are turning over your proof of rent payments. Most lenders will want to see your history for the past 12 months. If you have lived several different places for short periods of time then they may ask for a longer time period to show payments.
Tax paperwork for 5 years for each homeowner. If you are buying a home or a condo as an individual then this is only one person. If you are buying a home or a condo as a couple, then this is 2 people supplying tax paperwork. Most of the time, they will request about 5 years of taxes so it is best if this is what you prepare. Then you will feel a lot less stress and relief should they only request 3 years of tax paperwork from you.
A list of your current debts and paperwork to support them. This is quite important to your lender to understand what other debts you might have. This could include a car payment, student loans, medical bills and credit cards. You’ll want to make them aware of bills that you are in the process of paying back as well as your history of how you’ve been paying them back. It is best to give them at least 12 months of payment history for most of the bills. In some situations they may request a longer history but typically a year of payments is sufficient.
Investments is also something your mortgage lender will want to see. You may have a 401K, mutual funds, stocks or even property. Your mortgage lender should be aware of what type of investments you own. Make a list of them and then also supply them with supporting documentation that shows currently what the investments are worth. It is ideal to show what the investment has been worth over the past 12 months. Investments can truly count in your favor, depending on what they are.