When you finally decide to buy a home, the steps to get one aren’t as straightforward as 1-2-3. Before you finally get your keys and step into your house, you’ll need to get a loan so you can safely close the deal, especially if you need financial assistance in buying a home.
Many newbie homeowners find the mortgage quite intimidating because of all the paperwork and the loan horror stories they hear from other people. However, once you have an idea of what you’re supposed to do and what to prepare, things will be much easier for you.
For this reason, it’s best to work with reliable mortgage lenders so you can get a home loan with much ease, minus the hassle, worry, and complications. The great thing about having a mortgage lender is that they’ll guide you through the whole process so you won’t feel lost in the process or mountain of documents.
Speaking of documents, what exactly do you need to get a loan? If you’re confused about what you should provide, don’t worry — we’ve got you covered. Here’s a guide to help you understand the different types of documents you need when applying for a home loan.
When you’re getting a loan, one of the first things your mortgage lender needs to know is if you can afford the loan. To do this, they’ll need the following documents from you:
- Tax Returns: Mortgage lenders would want to see the last two years of your tax returns, and if you don’t have it, your lender may request you to do so. And if you live in a state that requires income tax, your lender would want your federal and state returns.
- W-2s or 1099s: Current employees are required to show their most recent W-2 forms. If you’re self-employed, you.” need to show your 1099sand request for additional income documents.
- Pay Stubs: Employees must submit at least two of their most recent payroll stubs.
Besides your income, lenders need to know about your current assets. Here are some documents you need to provide:
- Bank Statements: Lenders would often request at least two months’ worth of bank statements for any of your bank accounts — credit or savings.
- Investment Account Statements: Like your bank statements, you need to show two months’ worth of investment or brokerage statements, including retirement accounts.
Past Mortgage or Rent Payments
Your lender would want proof that you’ll follow through with monthly payments and that you’ll do so on-time. The best way to do this is by checking the history of your mortgage and rent payments.
- Current Mortgage Statement: If you’re currently living in a home and have a mortgage balance, you’ll most likely need to show a statement showing how much you still owe.
- Landlord Information: If you’re a renter, you’ll need to provide your landlord’s contact information and documents showing you’re paying rent on-time.
Finally, when your financial documents are in order, your lender will need to verify your identity and check your credit. Credit checks are vital as it determines your mortgage interest rate.
- Social Security Card: Your lender will request your social security card so they can run a credit check on you.
- Government-Issued Photo ID: Your lender may request a copy of your driver’s license or other photo ID as a requirement for your application process.
These documents may seem like a lot at first glance, but getting a home loan will be such a breeze if you work with a reliable mortgage lender.
The Bottom Line: Knowing What Documents You Need Before Hand Will Help You Have a Smoother Home Loan Journey
Now that you know the different documents that may be required of you when applying for a home loan, it’s best to organize them and keep them close by just in case your lender asks for it. You’ll realize that loans and mortgages aren’t as complicated as you thought they would be with proper communication and documents.
How Can We Help You?
Mortgages can be a nightmare to most people, but when you work with a reliable mortgage company like paloRATE, you can say goodbye to all the hassle and worries of getting a loan.
Here at paloRATE, our mission is to serve our clients with honesty, integrity, and competence. We want to provide home loans to our clients with competitive rates and closing costs while eliminating roadblocks you may encounter when securing a loan.
View live rates in your area, give us a call at (206) 719-2694, and apply for a loan today!