If you’d like to buy a North Shore home this summer or fall, now is the time to start gathering your mortgage loan documents. In today’s competitive market, it’s more important than ever for a homebuyer to have a pre-approval letter from a mortgage lender before they start their home search.
Which documents you need will depend on what type of loan you get. As your North Shore real estate agent, I am here to fill you in on the basics, so you can start collecting documentation now.
If you are employed, get a regular W-2 every year, and are applying for a conventional mortgage loan, here are the documents you typically need:
1. ID of some sort, such as driver’s license or passport.
2. Proof of income.
This could include pay stubs for last 30 days, last two federal tax returns, last two W-2s, and proof of any additional income, such as social security, alimony, etc.
3. Proof of accounts.
Last two statements for all bank accounts, including statements for
investment or retirement accounts.
4. Property. Bring settlement statement from any previous home sales, if applicable.
5. Other. If you rent, bring contact information for your landlord for the last two years. If applicable, bring a divorce/separation agreement or property settlement agreement.
6. If a family member is gifting you money for your home purchase, a mortgage lender will have a gift letter for them to fill out.
7. A letter of explanation for late payments, collections, etc. in your credit
history, if applicable.
For an FHA loan, the same documentation is needed. If you have 1099s instead of W2s, bring the last two of those.
If you are applying for an investment property loan, bring all of the above, plus settlement statements on any recent home sales, recent mortgage statements on all properties you own, proof of insurance for all properties, and current leases for all rental properties.
If you are self-employed or own a business, bring all of the same documentation, plus the last two years’ Corporate, S-Corp, LLC or partnership tax returns. You also may need the last two months’ profit-and-loss statements, balance sheet if applicable, and current business
If applying for a VA loan, you’ll need all of the above, plus a certificate of
eligibility (COE) from the Veteran’s Administration. This may require form DD-214 for certificate of release or discharge, statement of service if still on active duty, or form 26-1817 or form 21-534 for surviving spouses.
For a USDA loan, there are many additional forms involved. You can find more information on all of these document requirements in this House Logic article.
Start going through your documents and gathering them together, so when you make an appointment with a mortgage lender for a pre-approval, the process will be quick and painless! If you wish your credit score was higher
or your debt was lower, spend some time working to improve those numbers before applying for a loan.
Mortgage rates are at record lows right now, so don’t wait to apply! When ready to buy in Glencoe, Winnetka, Highland Park, Deerfield, Northbrook, Lake Forest, Wilmette, Evanston, Glenview, Riverwoods, Bannockburn, or other North Shore communities, give me a call. I am your North Shore real estate agent, here and ready to help!