You don’t need to get a mortgage pre-approval before you go home, but it’s a good idea, especially in a seller’s market where competition from buyers is fierce. Unlike a preselection, a pre-approval letter gives weight to your housing offer and shows sellers that you have the financial weight to guarantee your offer.
To be pre-approved, you need to review your income, employment, wealth and debt, says Bob McLaughlin, former executive vice-president and director of residential mortgages at the Bryn Mawr Trust in Bryn Mawr, Pennsylvania.
You probably already have many of the records you need or have easy access to them. Collecting documents shouldn’t take more than a week, depending on the lender’s requirements and if you need documents from outside sources such as a lawyer or the district government. Your lender may want more documents if you are self-employed or if your income comes from several sources. Also, be prepared to share information, such as your social security number, with which you can check your credit reports and results. Name and address of your employer; and your rental date.
Income and employment
The documents required to verify income depend on how you are paid. This step is easier for workers with a paycheck from a source who provides an annual W-2 form and who has little or no overtime or job differences.
Income tax returns: copies of your two most recent federal and state returns may be required.
W-2 employees: copies of W-2 forms and their last two payslips. If earnings include overtime, bonuses, or salary differentials, you may need your last discount at the end of the year.
Independent, independent, and independent entrepreneurs: independent borrowers, including independent traders, businesses and suburban corporations, will need a profit and loss account since the start of the year and two years of records, including Form 1099 that you used to report your income. and submit taxes.
Property income. Document the rental income, address, lease, and current market value of a rental property if you are using this income to qualify for a mortgage.
Bank Statements – Copy the 60-day bank statements for each account whose assets you use to qualify for the mortgage. Also, add blank pages with instructions.
Pension and brokerage accounts: two months of IRA account statements, investment accounts (stocks and bonds), and certificates of deposit. The latest quarterly statement of 401 (k) shows the balance carried forward. As with bank statements, include each page, including the blank pages.
Monthly Debt Payments: The lenders examine your payment obligations to calculate your debt to income ratio. List all monthly debt payments, including student loans, car loans, mortgages, and credit cards. Provide each creditor’s name and address, account number, credit balance, and minimum payment amount. If you do not have a credit history, utility bills or other regular payment records can be used to qualify for a mortgage.
Real Estate Debt: If your current property is mortgaged, please submit your latest bank statement with the loan number, monthly payment, loan balance, name, and address of the lender and the page with policy statements.
Rent: Tenants must provide proof of payment for the past 12 months and provide owner contact information for the past two years.
Divorce: If it is necessary, take your divorce decree to court and any court orders for child support and child support.
Bankruptcy and foreclosure: Ask your lender what documents you need and how long after bankruptcy or foreclosure you have to wait to re-enter the real estate market.
Advance Gift Letters – Lenders want to talk about your advance. You must indicate the sources of the money you wish to use. If your money contains gifts, you should receive letters from your donors.