Documents Needed to Apply to Buy a House
Mortgage lenders will require a variety of financial documents and reports in order
to pre-qualify a person for a home mortgage loan.
Home mortgage lenders typically have strict lending requirements. This is
particularly true for traditional fixed thirty-year mortgages. In order to comply
with the lender’s policies, the potential homeowner should gather documents and
make appropriate copies for the mortgage lender or bank files.
Home Mortgage Loan Application
Each lender will have its own mortgage application forms. These forms can be quite
long and will require a great deal of personal and financial information.
All information that is listed on the application will need to be proven with further
documentation such as tax returns. The home mortgage loan application should
be completed in its entirety and with full disclosure.
Pay Stubs or Proof of Income
The mortgage lender will be interested in proof of income to prove that the buyer
can afford the home loan payment. This can be accomplished by proving pay
stubs, an employment contract or tax returns. In many cases, the lender will
request the last two to three years of tax returns in addition to pay stubs to substantiate
income.
Additional income that is received through child support, alimony, investments or
other businesses should also be documented and provided to the lender. This
income will need to be verifiable and should be an ongoing source of income for
the buyer.
Credit Report
Part of the application process will be proving the lender with permission to request
a credit report. Depending on the lender’s policies, a credit report may be
pulled from one credit reporting agency or from all three. The three credit
reporting agencies are Experian, Equifax and TransUnion. While in most cases,
the credit reporting agencies have identical information, there are some situations
where information can differ slightly from one report to the next.
Potential home buyers should check their credit report before applying for a home
mortgage loan to clear up any possible discrepancies before applying for the loan.
This can be done through the Annual Credit Report website at no charge and without
any impact on the credit score.
Home Information
If the potential borrower is applying for a mortgage loan for a home where an offer
has already been made, the lender will need to be provided a copy of the negotiated
contract. This will give the lender the necessary information to determine
if the borrower can afford the home.
If the borrower has not yet found a home, the lender will be able to do a pre-qualification.
Based on current rates and terms, the lender will provide the borrower with
a home loan amount they are pre-qualified for in order to make the home shopping
process smoother.
When applying for a home mortgage loan, gather all documents ahead of time.
Make copies of all documents that will be given to the lender and only provide the
original of the home mortgage application to the mortgage lender. Do not apply
to multiple lenders at once as many inquiries into a credit report in a short time
period may lower the credit score.