Applying for a mortgage is not as simple as filing an application and waiting for a response. There are several steps involved, which are all part of the process of buying a home.
When you’re shopping for loans, the first step is to get preapproved. A preapproval letter is a lender’s written approval of a maximum amount that you can borrow. This is how you will determine your price range when you’re looking at houses. The amount you’re preapproved for is not a guarantee though, as you still need to meet the remaining conditions of the loan to obtain it.
To consider you for preapproval, the lender will an extensive check on your finances and credit record. This process can be tricky, and you’ll probably need to file numerous documents to demonstrate your finances. These will include information about your employer, your income and your debts. Not to worry, though – Keep can help break it down for you.
To help get you started, here’s a checklist of what most lenders require (but be sure to check with yours to be sure). If you’re buying the house with your partner or anyone else, they’ll need to file these forms too. The list may look exhaustive, but you’ll feel well-prepared once the papers are stacked in front of you.
- Driver’s license or ID card
- Social Security card or Individual Taxpayer Identification (ITID) number
- Residential address(es) for the last two years
- Two months of pay stubs from current employers
- Name(s) and address(es) of employer(s) for the last two years
- W-2s from the last two years
- Most recent tax return with schedules
- If self-employed, profit and loss statements for the last two years
- Additional income verification (child support payments, social security benefits, etc.)
- List of assets with values (car, life insurance, retirement funds, stocks and bonds, etc.)
- Two months’ of bank statements for checking and savings accounts
- Letter of explanation for negative credit items, gaps in employment or reduction of income
- Chapter 7 or 13 bankruptcy discharge papers
- Divorce decree
- If applying for a VA loan, certificate of eligibility
- Application fee (when required)
Confused about the loan application process? Our story “7 Steps to Take Out a Mortgage” breaks it down for you.
Need more help? The Keep Home™ app has all the resources you need for the homebuying and owning process.