Your Mortgage Preapproval Checklist – SmartAsset

To get pre-approved for a mortgage, you’ll need several documents detailing your income, assets, and debt obligations. This helps banks and other mortgagors determine exactly how much they are willing to lend you. Mortgage pre-approval also helps you understand how many homes you can afford, so you don’t have to worry about a home that’s out of your budget. We’ll walk you through this checklist. We can also assist you in finding a financial advisor who can guide you through the entire home buying process.

Compare mortgage rates here.

Mortgage pre-approval checklist

If you want to get pre-approved for a mortgage, here’s some of the paperwork you’ll really need.

  • Copy of ID – Your bank or mortgage lender will want to see your government-issued ID. So providing a copy of your driver’s license or passport is a must.
  • Copy of your Social Security card Do you remember where you put your Social Security card? If not, start doing some digging.
  • Bill – You can provide proof of your income in the form of pay stubs. If you work for yourself, you can collect profit and loss statements for your business. But if you’re covering your advance payment with a gift, get a letter from the supplier. Make sure it clearly states that this person does not expect you to pay him back in the future.
  • Tax documents- You should collect your tax returns (form 1040s) and W-2 forms dating from at least the past two years. If you are self-employed, you can provide your Form 1099. These documents will give your lender a complete picture of your most recent earnings.
  • Bank report – You should collect bank statements of all your accounts dating back 60 days. So make sure you provide records of bank accounts, savings accounts, money market accounts, certificates of deposit (CDs) and other banking products.
  • Retirement account statement – Even if you don’t plan on taking out a 401(k) loan to cover your mortgage payment, you should provide a statement of all your retirement plans within the past two months. The presence of these properties can increase your chances of getting pre-approved by a lender. It tells the lender you have some assets in reserve as a last resort.
  • Investment account statements – Do you have a brokerage account or other taxable investment vehicle? If so, include statements for both of those. That money is an asset that the lender will see as beneficial.
  • Records of your debt obligations: Your lender will review your income and debt obligations before you get pre-approved for a mortgage. So be sure to have a record of all your monthly payments ready. This includes rent, utilities, groceries, credit card debt, student loan payments, car payments, monthly bills for services like phone and cable, and real estate. any regular payments you incur.
  • Credit history: Your debt-to-income ratio will act as a key factor in determining whether or not you’ll get pre-approved. So, gather recent statements for your credit cards and any other interest-bearing debt you owe. If you don’t have a traditional credit history, you can provide documents such as utility bills and other common payment documents. Your lender will review your credit report, but it’s never a bad idea to do a free online review.
  • Reference from your host – This is not required but it can help your cause if you have proof of on-time rent payments and a letter from the landlord stating you are a reliable tenant . This type of letter can also aid the board’s approval process or convince the seller to accept your offer.
Read More:   How to Read a Good Faith Estimate

If you already own a home, add these items

  • Mortgage report – If you already own a home, whether you’ve paid it off or not, you can include your mortgage statement as part of your pre-approval package. These statements will show that you are keeping up with your payments. If you still owe money to buy a home, the bank will use that information when calculating your debt-to-income ratio. That rate helps the bank decide how much to lend you.
  • Property tax bill – Your property tax bills on the home you own are an ongoing financial liability. Your property tax bill affects your ability to pay your mortgage and property taxes on a second home. For that reason, the bank will want to know how much you are currently paying.
  • Proof of real estate income: Maybe you are making money from property you already own. Be sure to document all real estate or rental income and the current market value of the property for which you are generating this income.

Carried away

To get pre-approved for a mortgage, you basically need to provide detailed documentation that proves your identity, income, assets, and debt obligations. Any source of money will put you in good standing. The process may seem intimidating, but getting a mortgage pre-approval will save you headaches. For starters, you know more or less what you can stomach. This helps you find a home you can afford.

Tips for buying a house

  • Once you secure a mortgage, paying it off can be tricky. A mortgage is more than just a monthly payment. It consists of different pieces. To help you understand what you’re really paying and how to pay on time, check out our mortgage calculator.
  • If you want some professional guidance, we can help. Our financial advisor matching tool connects you with up to three advisors in your area. It also gives you access to detailed profiles, so you can compare their qualifications before choosing to work with one.
Read More:   The Most Livable Small Cities in the U.S.

Image credits: ©, ©, ©

Amelia Josephson Amelia Josephson is a writer passionate about financial literacy topics. Her areas of expertise include retirement and home buying. Amelia’s work has appeared all over the web, including on AOL, CBS News and The Simple Dollar. She holds degrees from Columbia and Oxford. Originally from Alaska, Amelia now calls Brooklyn home.

Last, Mid Coast Planning sent you details about the topic "Your Mortgage Preapproval Checklist - SmartAsset❤️️".Hope with useful information that the article "Your Mortgage Preapproval Checklist - SmartAsset" It will help readers to be more interested in "Your Mortgage Preapproval Checklist - SmartAsset [ ❤️️❤️️ ]".

Posts "Your Mortgage Preapproval Checklist - SmartAsset" posted by on 2022-07-17 11:24:39. Thank you for reading the article at - Real Estate Agents in United States

Back to top button