Documents Needed To Buy Your Home
To buy your house the first thing you need is to know how much the bank is going to lend you according to your current financial capacity. This is determined after doing an analysis of your debts and your income. This process is called Prequalification or Preapproval.
Getting pre-approved for a mortgage before you go home shopping is a required, especially in a seller’s market, where competition among buyers is intense. Unlike a pre-qualification, a preapproval letter lends weight to your bid on a home, proving to sellers that you have the financial clout to stand behind your offer. To get pre-approved, you’ll need to verify your income, employment, assets and debts.
There are several documents that are needed for the pre-approval of a loan for the purchase of your home. Here we describe it:
1. Pay Stubs
Lenders need to know you have stable income that will allow you to pay your mortgage each month. Bank on showing at least 30 days of income via pay stubs. If you don’t have paper copies, contact your workplace HR representative for digital stubs. Use our calculator to see how much mortgage you can afford.
2. Proof of employment
You may not need it, but a letter from your current employer with your hire date and employment status could be necessary to sway things in your favor.
3. Employer Contact Information
Again, steady income is the name of the game when it comes to securing a loan. Compile a contact list documenting your last two years of employment. Include all company names and address, along with names and contact information for your former bosses or HR representatives.
4. Tax documents
Be prepared to submit at least two years of tax returns and W2s, which will further support your income history. (If you haven’t already, be sure to sign your tax documents.) A long-term history shows your ability to pay your mortgage over the life of the loan — often 30 years. If your income has changed drastically year over year, your lender may require further explanation or documentation. Get some advice on how to organize important documents.
5.Bank Statement Information
Lenders want a snapshot of the money coming and going from your bank account. In most cases, 30 to 60 days of transactions will suffice.
6. Self-employment documents
If you’re self-employed, work as a contactor or otherwise operate a business, your lender will want to see tax returns (again, signed), along with year-to-date profit and loss statements.
7. Credit Information
Your qualification to receive a mortgage loan comes down to, in part, your debt-to-income ratio. Your pay stubs and tax documents show your income. Next you’ll need to show any outstanding loans you have, including car payments, student loans, additional mortgages or credit card debt.
Gather up-to-date statements that show your remaining balance. Go a step further and compile creditor names and addresses, account numbers, monthly payment amounts and outstanding balances on each account.
8. Confirmation of Property
If you own another property or have owned one in the past, be ready to provide proof of ownership or sale.
9. Residential history
Show your history with home address(es) for the last two years, along with landlords’ names and contact information if applicable.
10. Proof of Additional Income
If you receive Social Security or disability payments, pension income, dividends or bonuses, you’ll need to show it. Potential homebuyers aren’t required to disclose child support and alimony payments; discuss whether or not it’s appropriate with your loan officer.
11. Stocks, Bonds and Savings Statements
Your total assets will count toward your ability to purchase a home. Provide statements showing the value of your CDs, IRAs, stocks, bonds or other securities, including any money you’ll use toward a down payment.
12. Earnest Money Source
After you make an offer on a property and provide earnest money — a deposit held in escrow that shows your commitment to purchase — you’ll need to prove the source of that money. If it came from your savings account, a PDF of your bank account history will do the trick. If you received the money as a gift from a family member or another way, you may need to provide a letter confirming the source.
You can send us all your documents at: email@example.com
Buying a home is tough, but being organized will go a long way to ease the burden. In general these are the documents that the bank is going to ask you for but they can also ask you for other documentation depending on the type of work you do or type of loan that is being processed.
But regardless of your situation, our agents will guide you throughout the process to make this adventure easier for you. If you have any question Call Us Now at 305-742-8179 or 786-420-9464. If you do so you will never be alone.