Congratulations! Now that your offer has been accepted on your dream home, it’s time to move forward with the mortgage loan application. When you choose to work with The Potempa Team, you will work with a dedicated loan processor who will ensure all necessary paperwork is obtained so we can move forward to underwriting and final loan approval.
While the requirements for each mortgage loan application will vary depending on the loan product and state you’re in along with your unique circumstances, these are several pieces of information you should be prepared to provide no matter what.
In order to process your loan application, our team will need to verify that you are who you say you are. Typically, a state-issued ID is sufficient, but you may need to show a passport or other form of identification particularly if you are not a US citizen.
Expect to be asked to provide your income tax returns for the last couple of years. This is used to verify your reported income and deductions.
If you are an employee of a company, you’ll need to furnish your W-2s from the last one to two years of employment. We will also want your current employer’s information. This is one reason why it’s important not to change jobs during the loan application and closing process if you can help it!
Pay Stubs and Income Documents
Be prepared to show your pay stubs along with any additional income documents, such as commission or overtime payments. We will need to verify your stated income.
Copies of your bank statements are necessary to show you have the cash reserves to cover your down payment, closing costs, and more. Be aware that if your bank statements show any large deposits of funds, you’ll need to provide additional documentation to explain those. Usually, two to three months’ worth of bank statements are required.
Gift Letter for Gifted Funds
As stated above, if you’ve received a large sum of money from a parent, family member, or friend as a gift to use toward your home purchase, you will also need to provide a gift letter to document and explain it. Not every loan product allows the use of gifted funds so be sure to talk to your lender if you have any questions.
Retirement and Investment Account Information
Do you have a retirement account, 401(k), investment property income, stocks, bonds, or other investments? You guessed it—you’ll need to provide statements for all these accounts and cash resources, too.
Are you buying your first home? We will typically want to see twelve months of rental history in the form of proof of payments. We’ll also need contact information for your past couple of landlords.
Bankruptcy or Foreclosure Documents
Have you previously declared bankruptcy or been through foreclosure? We’ll need to see certain documents as proof that you are now cleared and ready to purchase a home. Foreclosure in particular comes with a mandatory waiting period of several years before you can be approved to buy again.
Divorce Decree, Alimony, or Child Support Documents
If you’ve been through a divorce and have alimony or child support payments, we’ll need documentation for all of that as well. It may seem like a lot, but underwriters need your full financial picture before final loan approval can be issued!
A credit check is conducted as part of the mortgage loan application process. If you have any late payments, collections, judgments, or issues with your credit, you’ll need to provide explanations. If you don’t have a lot of credit history available, you may also need to provide the payment history for bills such as your cellphone, utilities, water, internet, and more.
This is by no means an exhaustive list of everything you may be asked to gather and provide during the mortgage loan application process. Your loan processor will be by your side to guide you to the finish line and answer any questions. To prevent delays, it’s important to provide the requested items as quickly as possible.
Have questions? Ready to buy your home with The Potempa Team? Click here to get started!