Mortgage application is the first step to buying your dream home. However, you should do lots of preparation even before you face your lender and gain their trust. These steps include preparing all the necessary paperwork that you should submit together with your mortgage application.
How can you get your paperwork in order? The best way to do this is to use an extensive checklist of documents that your preferred lending company requires. If you do not have any idea about this checklist yet, you should read this article and understand its important pointers. By being aware of the itemized list of required documents, you will avoid any slipups that might delay the application process.
Copies of monthly bills and debts
Before giving your lenders an authorization letter to pull out your credit reports, you should review your monthly bills and recorded debts first. This can affect your entire application, especially if you are not yet sure about your income-to-debt ratio. By doing this, you can assess your credit scores and recognize if it fits the requirements of your preferred mortgager. You will also have time to improve or fix your bad credit scores before they find out about your problematic debt statements.
Why do lending companies need copies of your credit report? The answer to this question is very simple. They will use the information that they would get from it to assess your credibility as a borrower. If they find out that you are not paying your bills on time or you are having problems with your high-interest debts, they might reject your application and restrain you from obtaining a home loan approval.
Income from your job and other sources of income
Your income statements or your W2’s are also needed. Secure copies of this document for at least the past two years. You should also bring copies of some bonus slips or incentives that you are getting from your employer. They can ask you how much you get such incentives and how often your employer gives you these kinds of rewards. They will use this to compute an average of how much you are getting from your bonus pay, and add it to your total income. This will increase your earnings and your chances of becoming a qualified applicant.
Other forms of income, such as survivor’s benefits, pension, or any form of regular allowance should be included in your files too. Produce copies of deposit slips, bank account statements, or checks that show how much you have been getting from your additional sources of income.
Unemployment income
If the nature of your job is not stable, you should bring copies of your unemployment insurance payments. These will be computed as part of your regular income. If ever you do not find a release date in your unemployment checks, you should pass a copy of your bank statement that shows the date of your income deposit.
List of your investments and assets
Lastly, provide them a copy of your different investments such as stocks, real estate properties, or other valuable assets. Do not forget to include proofs of ownership and worth of each asset that you own in your portfolio. These documents can also increase your possibilities of gaining approval from your lenders.
These are only some of the paperwork that you should prepare before applying for a mortgage. You can also contact your lenders and ask them for a list of other paperwork that you will need for your application.
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