Being pre-approved for a loan is an important first step as we begin your search. Preapproval allows a seller to feel confident that you are a serious buyer, capable of financing the property and significantly increases the likelihood of your offer being considered. Some people go directly to their bank for a preapproval, although most choose to work with a mortgage broker. Mortgage brokers provide a single point person for your loan, and have relationships with various banks, which allows them to provide you with various options depending on your particular financial picture.
If you are a homeowner, you will need to provide your lender with your current address, most recent market value, mortgage lender name and address, account number, current monthly payment and balance due on your mortgage. If you are a renter, your current address, the name and address of your landlord, and your current monthly rent. Additionally, if you’ve lived at your current address for less than two years, you will also need to provide them with your past landlord’s name and address.
You will need to show them your fully-executed copy of the ratified sales contract and your receipts of earnest money deposit.
If any of your down payment or closing costs will be gifted to you by a donor, you will need to bring a signed letter from the donor. Your lender will be able to provide you with a template for this letter.
For those who are self-employed, a P&L (profit and loss) statement and balance sheet are required from the last two years.
You will need proof of student status if you have not been employed for two years. This can be in the form of a school transcript or diploma.
If you own real estate, you will need to provide your federal tax returns and a schedule of each property. If any of the properties are not paid for, you will need to provide the account number and address of the mortgage company. If any are rental properties, you will need to show a copy of the current lease(s).
They will need this from you and any co-borrowers.
They will want to see two of your most recent pay stubs with year-to-date earnings.
They will want to see the last two years of tax returns with W-2 tax forms. If you have any partnership interests, they will want to see tax returns and Schedule K-1 documents.
They will need the name, address and telephone number of your employer. Additionally, if you have been with your current employer for less than two years, you will need to provide the name, address and telephone number of your previous employer.
They will need the account number(s) and current statement(s) of your checking, savings, and any additional account(s).
You will need to provide them with statements of all your current assets, including IRAs (Individual Retirement Accounts), CDs (Certificates of Deposit), stocks and bonds. For stocks, they will want a current brokerage statement with the stock names, per share amounts, and numbers of shares you own.
They will want a list of your personal property with approximate value, including furniture, cars, valuable collections, etc. If you have life insurance, you will need to list this as well.
You will need to provide information on your current loans and credit cards. They will need the name of the creditor, address and monthly payments.
- Resources for Buyers
- Resources for Sellers