Despite the fact that many of us are still isolating at home due to the coronavirus, now is a good time to gather the documents you'll need as you prepare to buy a house. By taking time to do the necessary pre-purchase groundwork now, you will be prepared to hit the ground running when you can get out of and about and see homes in person.
When applying for a home loan, it's not as simple as filling out a document at your mortgage lender's office and instantly getting approved for a loan. In order to qualify for a mortgage and eventual home purchase, there are a lot of documents you'll need to locate. Gather everything in advance so you can get pre-approved for a mortgage before you find your perfect home. The following list will help you prepare for a visit to the lender.
- Photo ID
- Pay stubs from last 2 months
- W2's from last 2 years
- Checking and savings account statement from last 3 months
- Copies of statements from you IRA, 401K, CD's, money market funds, investments, etc.
- Employment history from last 2 years, with addresses and contacts
- Proof of bonus income or commissions
- History of residence from last 2 years, with addresses and contacts
- Assets for down payment, closing costs and reserves (need a paper trail)
- For self-employed: last 2 years of tax returns, current profit and loss statement and balance sheet, copy of corporate/partnership tax returns for last 2 years if you owned more than 25% of the company
- FHA loan: requires driver's license and social security card
- VA loan: requires original certificate of eligibility and DD214
- If you've had a previous bankruptcy, foreclosure, divorce, you many be required to supply more information
By lining up these documents, the pre-approval process will go much smoother and you'll have a better chance of purchasing the home of your dreams when you find it. If there are any issues, you'll be aware of them early so they won't interfere with your home hunt.
Once you're pre-approved, you'll know how much you can borrow and therefore spend on a home. You'll be able to focus on homes which are priced at or below your pre-approval amount and be able to close faster because information has already been verified.
Remember, even though many of us are still sheltering-in-place during the pandemic, we can still prepare to buy a home. Gather your documents, put them in a secure place, and when you're able to get out and about, you can share the documents with your lender to get pre-approved for a mortgage. Now that you've got some time on your, get busy locating all of the documents!
Get more information on home buying in our extensive guide: