If you’re ready to buy a home, it’s time to gather up this important documents. The number one reason closings are delayed is due to failure to submit all the required documents to your mortgage provider in a timely manner.
While it’s not as easy to obtain a home mortgage as it once was, it’s still can be easy. Depending on the time of year you’re buying, lenders may be really busy. That can mean longer processing time. In order to process your mortgage in a timely manner, it’s wise to organize your paperwork ahead of time. Especially if you want your pre-approvals to stick.
So what documents do you need?
Virtually all loan types require you to provide bank statements. Expect you’ll need to provide three months of bank statement for all your accounts. Those three months should have no large deposits, insufficient funds charges, and loan payments you didn’t claim with your lenders. Any funds you need to close need to be in your account for 60 days, so plan ahead for that. If your mortgage isn’t processed before rolling into a new month, you may have to provide another bank statement.
Your lender must verify your identity, so you’ll need a valid ID. A driver’s license or passport with at least six months left on it is perfect. If your ID is expiring soon, renew it now.
W2s and/or 1099s
Expect to provide copies of your last two years of W2s and/or 1099s.
You’ll need to provide your last two years’ tax returns. This includes all pages, all forums, including any amended returns. If you file returns during the mortgage process, you’ll need to provide proof you paid outstanding taxes and show where the money came from.
If you’ve been through a divorce or bankruptcy, you’ll have to provide copies of all those documents.
Letters of Explanation (LOEs)
Credit problems, gaps in employment, or gift funds from family to cover down payment or closing costs, will require Letters of Explanation. Your loan officer can provide an example of what details need to be included.
Current Mortgage Statements
If you have a current mortgage, your lender will want to verify the debt, payment status and loan details. If you’re renting, they’ll want to contact your landlord for proof of rental payment for the past 24 months.
Pay Stubs or P&Ls
Expect to submit your most recent pay stubs. If you are self-employed, be prepared to provide a year-to-date profit and loss statement.
Gather these documents now and save copies in the cloud, hard copies in your file, and copies on your hard drive. You want to be able to access these again easily throughout this process. Your lender will thank you!