If you’re like the millions of people every year who use a mortgage to buy a home or refinance their existing mortgage, here is some important information for you. In fact, if you’re thinking of buying, analyzing your finances with a mortgage professional and determining your financing options and price range is one of the first things you should do!
There is no such thing as a quick pre-qualification anymore. A true pre-approval means reviewing and verifying actual financial and credit documentation. A mortgage professional will do this by considering your credit, income and debts, your employment and residence situations, your available funds for down payment, closing costs, and reserves and other items as needed. This is what home sellers demand now, and when making an offer we will need to provide a pre-approval letter from a lender outlining your specific qualifications and ability to close on the deal. Below are the items needed for review to issue a pre-approval and get a mortgage application going:
Financial Information for EACH borrower (please provide what applies to you):
1. 2011 & 2012 W-2s, 1099’s & K-1s.
2. One month’s most recent pay stubs.
3. 2 months most recent complete statements for banking, investments and retirement accounts. Last quarterly statements are also fine, but please include all numbered pages.
4. 2011 & 2012 Federal Tax Returns with all schedules.
5. If you are self-employed 1099, please provide 2 years business licenses or we will need to obtain a letter from your CPA verifying that you are self-employed.
6. Also if you are self-employed or a 25% or greater shareholder in a corporation that you actively are working for, lenders are now requiring current year-to-date profit & loss statements.
7. If you are a 25% or more shareholder of a corporation, please provide the last two years most recent corporate returns with all schedules and K-1s.
8. If you are retired or receive social security benefits, please provide your monthly most recent statement or most recent award letter.
9. If you are retired and receive a pension or similar retirement income, please provide your most recent payment stub.
10. If you currently own property, please provide the current insurance policy declaration pages for each property along with your most recent mortgage statement for each.
11. Please provide a copy of your current state driver’s license and social security card (if you have it).
12. If you are not a U.S. Citizen, please provide a copy of your green card or valid visa.
13. If you are a landlord, please provide copies of all your current leases.
I suggest you keep a folder of this documentation and each month update pay stubs, bank statements and any other items that have changed. This way you are ready to act quickly when you want to make an offer on a home or re-finance. I have several excellent mortgage professionals that I work with – please feel free to reach out to me for a recommendation!