When buying a home, having everything ready in advance is a great idea. If you’re applying for a mortgage loan to finance your home purchase, you’ll have to take a deep look into your finances.
This is because lenders need to ensure you meet all the requirements before they approve your mortgage. You should meet their underwriting guidelines, and they need to make sure you’re in a position to afford your mortgage payment for the new home.
Throughout the approval process, you should expect to be asked for various documentation, and you need to be ready with them beforehand to avoid any last-minute panic attacks. A standard mortgage approval procedure takes up to sixty days as they check each aspect of your financial life. From your income and job status to your expenses and more, the list is endless.
Getting all your paperwork organized in advance is a great way to streamline the entire application process and minimize the chances of any delays and setbacks.
Here’s a checklist of things you’ll need during your mortgage approval process.
Income and Assets
This part of the application assesses your ability to pay back the loan. The lender will overview your current and past job experiences, the duration you’ve been employed and will also verify the provided information with your employers. Most lenders want to see a steady income flow for at least two years.
Your monthly income is an important number for the lender. Even if you’re retired and living on your savings, you’ll need to show that your income is reliable. For this, you’ll need to provide proof of retirement account balances and paperwork related to pensions.
Some common documents you’ll need are:
- Latest pay stubs
- W- 2 forms
- Profit and loss statements if you’re self-employed
- Bank statements
- Any other proof of income documents, if applicable
Expenses and Debts
Besides your income, the lender would also want to be aware of your financial liabilities. You’ll be asked to list out your expenses and debts as well.
Some common documents you’ll need are:
- Credit card statements
- Student, personal, or auto loans
- Medical receipts
- Related paperwork in case you provide monthly child support or alimony
- Proof of any other expenses, if applicable
Other documents
Although their primary concern is your financial health, mortgage lenders might need some other documents as well to move forward with the application process. Have these documents ready:
- Copy of your driver’s license
- Copy of your identification card
- Copy of your social security card
- Rental history
- Immigration paperwork, if applicable
- Paperwork if you own other properties
- Paperwork if you have another outstanding mortgage
Find the Best Loan Lenders Near You
Insula Capital Group is a private lending and investment company with over 30 years of service to its name. Our hard money rental loans are a great financing option.
Connect with hard money lenders for rental properties and private residential mortgage lenders to get the financing you need.