In today’s seller’s market, where competition among buyers is intense, getting pre-approved for a mortgage can lend weight to your bid on a home. Here’s a quick checklist of items you can begin gathering today to prove to sellers that you have the financial clout to stand behind your offer.
- Tax returns: Copies of your two most recent federal and state returns.
- W2 wage earners: Copies of W2 forms and your two most recent payroll stubs.
- Self-employed, freelancers, and independent contractors: Self-employed borrowers need a year-to-date profit and loss statement and two years of records, including the Form 1099s you used to report income and file taxes.
- Real estate income: Document the rental income, address, lease, and current market value of a rental property if you will use this income to qualify for a mortgage.
- Bank statements: Copy of at least 60 days’ worth of statements for every account whose assets you’re using to qualify for the mortgage. Include every page, even blank pages.
- Retirement and brokerage accounts: Two months of statements from IRAs, investment accounts, and CDs. The last quarterly statement from 401(k)s showing the vested balance. Include every page, even blank pages.
- Real estate debt: If your current property is mortgaged, copy of your most recent statement.
- Renters: Renters need to show payments for the past 12 months and provide contact information for landlords for the past two years.
- Divorce: If applicable, have your court divorce decree ready, along with any court orders for child support and alimony payments.
- Bankruptcy: Copies of all your discharge paperwork and/or a letter documenting extenuating circumstances if applicable.
- Gift letter: Some loan programs allow you to use gift funds to cover your down payment. If a relative or friend gave you money for this purpose, they may need to write a letter confirming this and stating that they don’t expect repayment.
As you go through this checklist, find each document and label it accordingly to make it easier for you and your lender. In addition to these documents, the lender will also check your credit score, which will influence your interest rate. For every loan program, there’s a minimum credit score that you’ll need to have in order to qualify for a mortgage. Generally, having a higher credit score will mean getting a lower interest rate.
If you think your credit score is low or believe your credit report is inaccurate, contact Legacy Credits. They specialize in fixing your credit and helping you get the home you and your family deserve. With guaranteed results in just 45 days, schedule your free consultation now.