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Documents Needed To Apply For A Mortgage – Being pre-approved for a mortgage makes it easier for you to buy a home because the seller knows they can close faster. To be pre-approved, you need a set of documents to show a lender that you are able to meet the terms of a mortgage. This gives you an advantage against other home buyers who are not pre-approved and often makes you more likely to be selected in the event of a bidding war. It’s something that should be on your home buyer checklist. So, what do you need pre-approval for?
The exact set of documents required for mortgage pre-approval differs depending on the lender and the type of loan you are applying for. However, you can expect to provide a core set of personal documents to fill out the loan documents. This information is used to verify your ability to repay the loan with other mortgage loan criteria. A mortgage pre-approval can also go through the underwriting process even if you have not made an offer on a home. There are many ways to get pre-approved to buy a home, and a mortgage expert can help you learn more about your options.
Documents Needed To Apply For A Mortgage
Getting pre-approved for a mortgage is similar to going through the mortgage process, but with fewer steps. The main purpose of getting pre-approved is to learn how much you can spend on a house and speed up the real mortgage process once you have your offer accepted. It’s worth taking the time to get pre-approved because of the advantage you have when looking for a home to buy. The following is a look at which documents are required for a pre-approval of the mortgage.
Guide For Self Employed Mortgage Applicants
A mortgage pre-approval is when a lender looks at your financial situation to determine how much money they can be willing to lend for a home. It also tells us how much house you can buy, and eliminates an unwanted surprise in the form of being told that you cannot borrow as much as you need when you apply for a mortgage.
We’re here to help guide you through your home buying journey, whether you’re just starting your search or looking to refinance your current property.
The pre-approval process is similar to applying for a mortgage in that you show proof of your income, assets and debt. Even if you don’t get financing to buy a house, the lender needs to determine how much money they can safely pre-approve. After the lender has determined the maximum amount you can borrow, they will give you a letter that you can show to a seller and improve your chances of going under contract on a house.
It is worth noting that a pre-approval letter is not necessarily a guarantee that you will be able to get a mortgage. You can get your pre-approval withdrawn if you have a significant change in your income. However, if there are no changes in your income between the time you pre-approved and you go under the contract, then the amount you pre-approved should be kept when you apply for a mortgage.
What You Need To Know Before Getting A Home Loan
In general, it takes about 10 business days to get pre-approved, but the type and complexity of the loan can extend or shorten this time frame. The time it takes to get pre-approved has the potential to shorten the length of time needed to finance a mortgage after an offer has been accepted.
You will need the following documents to properly prepare your mortgage documents for pre-approval and avoid making mistakes. The following list of documents can be used as a checklist to help you get everything in one place and ready to go.
Lenders must be able to verify your ability to repay the mortgage, even through a pre-approval letter. Lenders may ask for the following documents to verify your income:
In the event that you own valuable goods or personal property, you may need to show proof of ownership or declarations. Some assets that are considered for pre-approval include IRAs, CDs, stock investments, 401(k)s, and mutual funds. Money or cash equivalents that have statements to prove their existence are also valid. Last but not least, any physical asset that can be sold to generate money can be included, as long as you have a title or something that proves ownership.
First Time Buyer Guide
You can get a free credit report annually from the credit rating agencies, but your lender can also pull your credit report with your permission. A credit report contains information including loans you’ve taken out for various purposes, current balances on your credit cards, and other various debts you’ve incurred over the years.
Your credit report also states your credit score along with any late or default payments you’ve made. A high credit score helps you get better repayment terms in the form of a lower interest rate and other loan incentives. Late payments or defaults tend to stay on your report for seven years before falling off, and affect your credit score if they are not resolved. It may be a good idea to check your credit before filling out the loan documents for pre-approval of the mortgage.
Debt statements include all your outstanding debts. That includes student, personal and auto loans, credit cards, and any other outstanding debts you are currently paying off. This is to get an idea of your debt-to-income ratio and help determine how much you can borrow.
In the event that you are looking to buy a house and move from renting, you need your rent payment history and references from your current owner. If you’ve moved frequently, you may need to get references and payment history from multiple employers.
Home Loan Process
You may or may not be asked to show your rental history and get a reference from your landlord. Using rental history as part of the pre-approval process is not an industry standard, but it is a wise idea to have this information on hand in case it is requested.
Have you received a gift of money towards a down payment from a relative, friend or acquaintance? In this case, you may need a gift letter from the person giving the gift. A gift letter says that the money in your account is the result of his gift to you. This is to document the source of the money as a gift and not from another source such as a loan.
Not everyone can be approved for—or wants—a traditional mortgage to buy a home. Non-qualified mortgages may offer better terms or advantages over a traditional mortgage. However, it is still possible to get pre-approved for Non-QM loans and non-conforming loans.
Pre-approval for non-conforming mortgages requires documents that are not required for a traditional mortgage. For example, if you are a military veteran who wants to get a VA loan, you need a Certificate of Eligibility (COE) from the branch of the military in which you served. Or, if you want to take out a bank statement Loan, you may need to provide bank statements that go back a period of time to show proof of income.
Help & Support: Loans
Getting your mortgage documents together and organized before applying for a pre-approval with Griffin Funding makes the process less stressful. Taking the time to get all your financial documents together will save you time when filling out the mortgage paperwork. The lender will review your application and determine how much housing you can afford. Preparation also reduces the potential for an error that can delay your pre-approval process.
At Griffin Funding, we want to help you buy the home of your dreams. Contact us today to speak with one of our loan specialists to learn more about our pre-approval process. We offer a range of mortgage products that include Non-QM loans, and we can help buyers apply for an FHA loan when they don’t have a large down payment on a home.
Our loan experts can also help first-time buyers take advantage of first-time buyer programs that provide various forms of financial assistance and make it easier to pay for a home. Contact us to learn more about the different types of mortgage products that may be available to you.
Bill Lyons is the Founder, CEO and President of Griffin Funding. Founded in 2013, Griffin Funding is a national boutique mortgage lender that focuses on providing 5-star service to its clients. Mr. Lyons has 22 years of experience in the mortgage business. Lyons is seen as an industry leader and expert in real estate finance. Lyons has been featured in Forbes, Inc., Wall Street Journal, HousingWire, and more. As a member of the Mortgage Bankers Association, Lyons is able to keep up with important changes in the industry to provide the most value to Griffin’s clients. Under Lyons’ leadership, Griffin Funding made the Inc. 5000 companies that have faster listed five times in their 10 years of activity.
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