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Buying a home is exciting, but the process of getting a mortgage can be a little nerve wracking. Fortunately, there are lots of steps you can take to make the process easier. Before you even begin to look for a home, first take the time to sit down with a mortgage officer. A qualified loan officer will review your income, debt and savings information and help you become prequalified for a mortgage. With prequalification, you'll have a more accurate idea of how much you can afford, and you get a better idea of what you need to do to get a mortgage. Once you find the house that you really like and make an offer, you get into a wait-and-see time period. You have to complete all the paperwork necessary for getting the loan, and then you have to wait while they evaluate your loan application for approval. Is there any way you can automate the process? Well, you can help streamline the application if you have all your documents together before you apply - loan applications are length and require a lot of paperwork. Just gathering your materials together in advance takes some of the stress off of the application. Income Verification-Of course the lender wants to make sure that you have a steady job and are able to make your monthly mortgage payments. Gather together any information related to your income and steady employment. Bring in W2 forms for the last two years to verify your reported income. Also include a current check stub, to verify that you haven't changed employers or income. If you are self-employed, you may not have a W2. Instead, gather copies of your federal tax returns (1040's) for the last two years. You'll need copies of your tax records if you receive regular income from capital gains or interest income, if more than 25% of your income is from commissions or bonuses, or if you have rental income. If you are in business for your self, find copies of your year-to-date Profit and Lost Statements and any Corporate or Partnership tax returns. If you are retired, bring copies of your pension letter or social security award letter. Asset Verification-The mortgage company will need records for any and all assets you may hold. Copies of bank statements for all accounts - bring all pages of your account summary, even if you don't think it's necessary. Stocks, bond, and mutual fund statements for the last two months. Copies of latest 401k statements (or any other retirement assets). Explanations for any large deposits and sources of the funds. Letters detailing any large gifts (deposits) such as a gift of a down payment. Most financial institutes can provide you with a blank form. Include a copy of the check and a copy of the bank deposit receipt. Credit Verification - Your credit and debt ratio will be carefully scrutinized. The lender will pull a copy of your credit report. You want to provide documents that show your current credit situation and explanation for any credit problems. If renting, provide landlord's name, address and phone number. Explanations of any items that appear on your credit reports - such as late payments, credit inquires, charge-offs, collections, judgments, liens, and copies of bankruptcy papers. If you are divorced, you should include copies of your divorce settlement and any copies of child support agreements. There's a lot of paperwork required to take a mortgage, but you'll find that doing a little homework ahead of time can really smooth out the process.
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