Home Loan Homework: Everything You Need for Your Mortgage Application
Gather the right documents now—to help make getting a home loan simpler.
The home loan process has changed a lot over the past several years. If it’s been a while since you last bought a house or if it’s your first time, you might be surprised at the jungle of documentation you’ll need for your mortgage application. And it may be different for everyone.
“In the old days, you had this set list of documents,” says Brad Seibel, head of lending for AAA Banking Services. “Now it can vary based on your credit history, what you’re using for a down payment, what type of property you’re buying—there are all sorts of variables.”
But there are some common things to look out for. Here’s everything you need to know now to help you start gathering the necessary documents for your home mortgage application—before you fall in love with the home of your dreams:
But first, preapproval …
To speed up the process and save yourself stress during your home search, it’s best to get preapproved before you submit your mortgage application. To do so, you’ll want to gather the applicable documents listed below and give them to your lender. Then, when you find your new home, all you’ll need is the purchase contract.
“Once you’ve decided on the house you want to buy, you have other things to think about—like home inspections and renovation projects,” says Seibel. “It’s nice to have the bulk of the loan work behind you.”
Now, the list …
Here are the documents and other information you’ll likely need to gather for your home mortgage application:
Lastly, credit …
Though not a requirement for your mortgage application, it’s a good idea to get a copy of your credit report so you can make sure there are no surprises before the lender checks your credit. (You’re entitled to one free copy of your credit report every 12 months at AnnualCreditReport.com.)
One tip: “Now is not the time to apply for a credit card or another loan,” says Seibel. “You don’t want your credit to be changing while you’re applying for a home loan.”
And remember that you don’t need perfect credit, but if you do have any credit blemishes—such as a late payment—it’s smart to come to the home loan process armed with an explanation. Maybe you were out of work at the time or on medical leave. Having that explanation ready keeps your lender from having to guess—and eliminating guesswork is one less obstacle to closing day.