Step 1 – Preparation

Before you start the application, it is easier of you collect the documents and information you need. You will need information about your income, your house, the assets you own (ie. investments, 401K, car, etc.). You may not need all of the information listed here, but it is better to be prepared. Below is a list of suggested documentation.

Income Documenation

2 years of tax information
W-2's or completed Tax Returns

Proof of 1 month of income, a Pay stub is suggested

Some financial institutions require proof of 2 years of work history. If you have worked for an employer, than the tax information is sufficient.
If you have changed employers within the last 2 yeras, you will need to perform verification of emplying. You can bring witih you phone numbers for the human resources offices for your employers during the past 2 years.

Your lender will want proof that you have reserves to make payments regardless of your employment status, as well as having enough money available at closing.

The items you will need depend upon whether or not you will be bringing cash to the closing.

Depending on your loan, you may need to show proof of 1 to 6 months of mortgage payments available as liquid assets, you can ask your mortgage expert what is required for your program.
This proof can be

  • Bank Statements
  • 401K Statement (Most lenders consider 70% of your 401K balance to be liquid assets)
  • Money for Closing
    Your lender is looking for proof that the money has been in your possession for at least 90 days. Three months of bank statements will do this, if the money has been in your bank account. You can also show ownership by showing withdrawal slips, if you have transferred money between accounts or by obtaining the money from a relative. By explaining the situation to your mortgage professional, you can obtain the correct documentation up front rather than trying to correct a problem later.

    Proof of Insurance

    You will need to present a copy of your homeowner's policy with the account number and declarations. This will be used to determine if the policy is up to date and is insuring your home for at least the amount of your new mortgage. If your policy covers your house for more than the mortgage amount, that does not affect your mortgage.

    Your mortgage company will notify your agent of your lender prior to closing.

    Legal Description of Property
    Either a property tax bill or a copy of the survey done when you pruchased your home will provide this information, this will be used for your title insurance and to determine what, if anything, is owed on your property tax. If you are just purchasing your house, you should bring the name and number of the realtor with you, or have them send that information to your mortgage professional.

    If you get all of that together, it should ease the process. Click here to find out more about the Application Process.