Applying for a mortgage: What’s needed during the application process
There’s a lot of paperwork and documentation involved when you buy a home. Know what types of documents you may be asked to provide and make a game plan on how to stay organized.
During the home-buying process, you should be prepared to provide the following paperwork to your lender:
• W2 statements from the last couple of years.
• Recent pay stubs — These will show your lender how much money you are actually earning.
• Current bank statements — This paperwork will help your lender determine liquidity and they will also look to see if you’ve made any big transactions recently. Generally, your lender will look at the last two months of activity.
• Federal tax returns — Typically for two year.
• Asset statements — Your lender will want to see if you own stocks, bonds, mutual funds or retirement accounts.
• Copy of current driver’s license.
• Credit report — You will provide information to your lender, so they can run your credit report. However, if you run a credit report on your own beforehand, it gives you the opportunity to address any mistakes or dispute any claims that could affect your credit score and interest rate before applying for a loan.
It’s important to stay organized during the process, and provide all paperwork in a timely fashion. Brenda, a homebuyer, recommends: “Create a binder for yourself. I had a binder of the homes that I was seeing and checking off what I liked and disliked of those homes, so when I got to the closing process I also had all those documents ready to go, so it just became a real seamless. I need you to do this and it was like here, here you go, here you go, here you go as opposed to oh my gosh where did I leave that.”
Another option may be to keep a copy online. This way, even if you’re not at home, you’re still able to access documents from anywhere as long as you have an internet connection.
CURT: I want to make sure that I get the documentation from you that’s needed to move your loan through the process as quickly as possible, and that any time that I ask for something or my processor asks for something, that we get that as fast as we possibly can.
MICHAEL: So what we’re going to do is we’re going to break everything down to maybe your tax returns to looking at everything on your pay stub, and a lot of times there’s things that might not make sense to an underwriter, but make perfect sense to a borrower, and so that’s why we might have to reach out and ask additional questions.
ADAM: They’re going to ask for your most recent W2 statements for the last couple of years. They’re going to ask for recent pay stubs. The next step they really look for is looking for that liquidity you have to make a down payment. So they’re going to ask to see all your current bank statements for the last two months, and they’re going to be looking for things in there. Like you know, any big transactions that they see, they’re going to ask you questions about, just to make sure no one’s kind of gifted you a bunch of money to use in the home buying process. So, you may get questions beyond just turning in those most recent bank statements, on you know, “What was this transaction all about?” It’s just being prepared for that and having to be comfortable with disclosing maybe more than you’re used to about your finances, I think is something that’s important to think about ahead of time.
BRENDA: Create a binder for yourself. I had a binder of the homes that I was seeing and checking off what I liked and disliked of those homes so when I got to the closing process I also had all those documents ready to go so it just became a real seamless I need you to do this and it was like here, here you go, here you go, here you go as opposed to oh my gosh where did I leave that.