Preparing for your mortgage application
Save yourself some time.
One thing you can do now to prepare for the day you’re ready to make an offer on a home is plan for the accounts, documentation and resources you’ll need when you file a mortgage loan application.
Below, I’ve spelled out some actions you can take now and some documents you will need when you apply.
Preparing for Your Mortgage Application
Income
Provide your last two paystubs along with your W2s and Federal tax returns for the last two years (include all schedules). State returns are not needed.
If you are self-employed, ask me for the additional documentation requirements.
If you receive bonus or commissions or have changed your job or position, talk to your lender.
Assets
Combine all the funds needed to close into one account at least two months prior to your application.
Document any other deposits here as each could be scrutinized.
Deposits
Deposit checks individually.
Don’t deposit cash without clear proof of the source.
Liquidation
If you are going to sell stocks, bonds, investments or borrow against a retirement account, do it now. Cashing out now may cost you a few dollars in additional gains, but it also protects against losses.
Current Housing
If you own and are selling, provide a copy of your Closing Disclosure.
If you own and are not selling, you’ll need to qualify for both homes or meet the requirements for renting the current.
If you are renting, show 12 months of canceled checks demonstrating timely payments and/or written verification from your management company. Ideally, pay your rent on the same day each month on or prior to its due date.
If you live with family, you may need a letter stating that you live rent-free.
Credit
Check your credit report at www.annualcreditreport.com. Identify any errors now and consult with us for the correct action to take.
If you co-signed a loan or are being reimbursed for a loan that’s in your name, you’ll need at least six months of checks to exclude it.
Avoid new credit or inquiries. These can lower your score and increase your rate.
Employment Stability
Ideally, you’ll have two years or more with your current employer.
Consult with us before changing employers, position or method of compensation. For example, don’t switch from salary to commissions.
