One of the most tedious parts of home buying is gathering the documents you will need for the application but prepping beforehand makes this task much easier.
The documents required for a mortgage application can be categorized into four types: Proof of Income/Employment, Proof of Assets, Credit History, and Residential History. These give lenders like Town & Country a glimpse into your financial situation to help make sure you are eligible for a home loan. Here’s a checklist you can use to tackle the mortgage application process.
As you might have expected, income plays a significant role in a lender’s decision-making process. Multiple documents are needed to prove you can afford the payments.
Tax Returns. Many lenders require at least two years of tax returns & W-2s to prove income stability. Check with your employer or the IRS if you don’t have these available.
Pay Stubs. Lenders usually ask for pay stubs from the last 30 days to demonstrate how much you’re currently making or have made in the past.
Alternative Forms. Other sources of income like child support, social security, disability, etc. might need to be proven through direct deposit information instead of a pay stub.
Employment Letter. This letter confirms your hire date and employment status.
Employer Contact Information. A lender may request a contact list with the company names, addresses, former bosses, HR representatives, and contact information.
The lender will look at assets to see how much cash is available to you if something were to happen and you couldn’t pay for the mortgage. As proof of your assets, they’ll look for the following documents:
Bank Statements. Lenders will ask for bank statements that cover the last 30-60 days, proving what goes in and what comes out of your account every month.
Proof of Property. If you own another home/property, be prepared to provide proof of ownership.
Gift Letters. Written documentation that proves money given to you is a gift specifically to pay for your new home and not a loan.
Credit History. A lender will want to make sure you've been consistent with your past payments in order to know that you are trustworthy and can take on the responsibility of another major monthly expense.
Credit Report. Lenders will pull your credit report to check your credit worthiness.
Residential/Renting History. This is helpful if you lack an extensive credit history and necessary if you’ve never owned a home.
Proof of Rent Payments. Lenders may require proof from your previous landlord that you are able to make on-time payments. To get this, you’ll need either printed or digital physical statements from your housing office or landlord.
List of Previous Addresses. Be prepared to provide a list of all past addresses as well as names of past landlords and their contact information.
By organizing these documents ahead of time, you’ll likely stress less and have a better experience than if you started the home-buying process empty-handed.
Would you like to learn more about buying and financing a home including how much of a mortgage you can afford? Then check out Town & Country’s Financial Education program called Banzai here.
Feel free to reach out to us anytime to discuss your home financing needs or any other money questions you may have. Contact us at 800.649.3495 or firstname.lastname@example.org to schedule time to talk with one of our member service representatives.