Home Mortgage Application Checklist

Written by Posted On Tuesday, 14 May 2019 13:11
Mortgage Application Checklist When Buying a House Mortgage Application Checklist When Buying a House

What Do You Need to Give to a Lender to Get a Home Mortgage?

Any mortgage application process will be made easier and faster when you have the right documentation available. It is better to plan ahead and create a checklist of everything you will need in order to complete your loan.

One thing that you should do well ahead of time is to check out your credit score and accompanying report. It could be that your credit profile needs cleaning up. This is the one document all lenders will make sure they check out before they give you a mortgage.

If you're the type of person that loves to be prepared ahead of time, you' ll love the guide on what you need to provide a lender in order to get a mortgage for a home purchase. The article at Maximum Real Estate Exposure goes into depth of the documents needed for each of the most popular types of loans.

Below you'll find a summary of what's needed to get a mortgage for most lenders.

What Are the Most Important Items on Your Checklist?

The most important items on your checklist include pay stubs, W2's from your employer, bank statements and tax returns. Not all lenders ask for the same information. There are some lenders that will ask for other information as well.

These days many lenders like to check up on potential borrowers more than ever before. It is not uncommon for a lender to ask you to provide a list of debts. If you are asked for this information, not only should you provide them with the balances of the outstanding debt. At the same time, it is a good idea to make sure you have proof available you are paying off your debts on time. Debts can be anything from a credit card balance to an auto loan.

Remember when buying a home the lender will be doing a thorough interview. You should also be doing an interview on them as well. Understanding how to pick a lender is vital when you are making such a significant purchase. The terms your receive will have long term financial consequences.

Additionally, it is also critical that makes you comfortable and provides you the service you expect. It is not enough to get a great rate if you can't get financed in a timely fashion. Every seller and their respective real estate agent are going to quite conscious of the timing of the mortgage commitment.

Education yourself and asking a lender lots of questions is just plain smart. The best home buyers have a strong grasp of the entire financing process. Make sure you are completely satisfied with the answers given. If you are unsure about anything don't let it go. You should feel completely at ease with the entire loan process.

What About Assets?

Yes, you should provide any lender with a list of assets as well. Assets are in general not something which shows up when you run any form of credit check. Assets can be anything from shareholdings to a pension plan.

Sharing this information with a lender gives them extra security. As a result, you are more likely to end up with a better interest rate offer.

Self Employment Documentation

If you work for yourself or run a company, you need to come up with information which gives a lender a true picture of how much you earn. Increasingly financial institutions like to look into company finances if you happen to be an owner. After all, should your company fail, it is likely that you may lose your income altogether.

When you are self-employed or own a company, it is a good idea to ask your accountant to provide you with an updated profit and loss statement at the time of the application.

Are You Renting Your Current Home?

It can be tempting to pay your rent in cash, but it is not such a good idea. Paying your rent by transfer will let a lender immediately see that you are paying your rent on time. However, if you can't provide bank proof that you are paying your rent on time, you need to ask your landlord for a letter stating that you are doing so.

Proof of punctual payments is worth its weight in gold when it comes to the mortgage application process.

Additional Sources of Income

These days, a lot of people have a main source of income and an additional source of income. Some make a small fortune in their spare time as affiliate marketers or eBay sellers. Of course, the income you receive from marketing online or Adsense should be added to your income tax. It is easy to forget that this income is taxable, and you should declare any additional income.

However, if you have forgotten to do so, there is no need to panic. You can add a list of additional income with back up documentation. Check out your Paypal account, and pull off a report which shows a loan provider your additional income. Make sure that it agrees to what has been received into your bank account, or what you have spent using Paypal.

A Signed Sales Contract

The signed sales contract needs to be on your checklist. The sales contract should always show details of any deposit you have agreed to pay in addition to the mortgage. When you go through the mortgage or loan application procedure, any deposit is still likely to show up as an asset or part of a bank account balance. Your lender will need to know all of your financial commitments with regards to your property purchase.

It is crucial for any lender to understand your complete financial situation. For instance, if you have been through a bankruptcy, you will also need to prove you have been completely discharged from any financial obligation. Some lenders even ask for previous divorce decrees.

Borrowing money is mainly about paperwork. When you have everything in order, it is much easier to give your lender a complete financial picture. The more transparent you are when it comes to your finances, the easier it will become to obtain the right loan or mortgage deal.

With the great depression we went through in the late 2000's lenders became much more conscious of accepting the right loan candidates. You'll want to prove to any lender they will have no problem lending you the money.

What About My Credit Report and Score?

Before you ever speak with a mortgage broker and certainly before every looking at homes your financial house should be in order. Doing so takes long term planning. To get the best mortgage terms you'll need to have a stellar credit history. Borrowers with the best credit scores have a leg up on folks that don't.

It is wise to check on your credit first. Get a complete picture of your credit history. You can do that through the three major credit bureaus which Equifax, Transunion, and Experian. By getting your credit reports you can do two things - one, make sure there are no mistakes as that could adversely impact your score and two look at where you are weak.

Is there anything you can do right away to raise your score? It is smart to work on getting your credit to the highest levels possible before you commit to a home purchase.

More Financial Resources Worth a Look

Use these additional mortgage and financial resources to make the best possible decisions when you are going to be buying a home.

About the author: Bill Gassett is a nationally recognized Real Estate leader who has been helping people buy and sell Metrowest Massachusetts real estate for the past thirty-two plus years. Bill has been one of the top RE/MAX Realtors in New England for the past decade.

In 2018 he was the #1 RE/MAX real estate agent in Massachusetts. His real estate advice has been featured on, CNBC, RIS Media, National Association of Realtors, Inman News, Placester, RESAAS, Credit Sesame and others.

Bill covers real estate sales in the following Massachusetts communities: Ashland, Bellingham, Douglas, Framingham, Franklin, Grafton, Holliston, Hopkinton, Hopedale, Medway, Mendon, Milford, Millbury, Millville, Natick, Northborough, Northbridge, Shrewsbury, Southborough, Sutton, Wayland, Westborough, Whitinsville, Worcester, Upton and Uxbridge MA.

Reach out for his advice anytime.

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