WHY APPROVAL MATTERS
The first step in any home search is finding out exactly how much home you can afford and securing the financing to make the purchase. While you can get a rough estimate through prequalification, taking the extra step to obtain pre-approval will give you some added advantages.
Pre-approval helps you:
Understand your financial condition
Know exactly how much home you can afford before you begin your home search
Strengthen your purchasing power when making an offer
When you find a home you love and are ready to make an offer, your mortgage pre-approval lets the seller know that you're serious and fully prepared to buy their home, putting you in a stronger position than other potential buyers.
Here are some of the initial documents one may need when applying for a home loan.
Most Recent Two Year’s Federal Tax Returns (all pages and schedules)
- We want to get the full story of a buyer’s financial situation, and want to make sure reported annual income is consistent with reported earnings through pay stubs and confirm there are not huge fluctuations from year to year.
Most Recent Two Year’s W-2s
- We will likely require the most recent two years W-2’s from all current employers for each loan applicant. If new W-2’s become available during the loan application process, we may require those to be produced as well. If a buyer is self-employed, they will be asked to provide 1099 forms.
Most Recent 30 Days Pay Stubs
- Pay stubs help gauge current earnings, and help document proof of employment and proof of sufficient ability of a buyer to repay the debt created by the loan.
Most Recent 60 days Bank Statements
- When assessing the risk profile, lenders will want to look at bank statements. Lenders typically request these documents to see that the buyer has the funds available to close, and that these funds have been in the account for at least a few months and did not just show up overnight.
Two Forms of Identification
- A buyer will need to provide a photo ID, such as a driver’s license and/or passport. Many times a second form of ID will be required. This is simply to prove the buyer is who they are claiming to be.