Dreaming of owning your own home? Or thinking of moving up into a bigger place? Before you start your search for your new home, you can get ahead of the game by being prepared with the information you’ll need to apply for a mortgage.
The list is long so start gathering early and make a central file to store everything together in one place.
Start with what you owe. You’ll need to be able to show documentation detailing everything you owe each month including current mortgage, credit cards, student loans, car loans, and taxes. Have copies of recent bills to show your lender.
Next, you’ll need proof of your income. Locate your most recent W2s and pay stubs along with your last two year’s tax returns. You also need proof of other types of income like alimony or child support, sales commissions, or self employment income.
You will also need to show information about your assets. Track down statements from your savings accounts, retirement accounts, stocks and bonds, or life insurance with a cash value. If you’re getting help with a down payment from a friend or relative have them write a letter explaining that the money is a gift and won’t need to be paid back. If it is going to be paid back that needs to be documented as something you owe.