5 Important forms of documentation needed to get pre-approved for a home.
During the home purchase process, there are a lot of firsts for a buyer. Even previous buyers need to relearn the process, but the most important and initial step to remember is to secure a solid mortgage pre-approval.
Once the decision has been made to purchase a home, each buyer should learn the ins and outs of the home buying process. This will most likely be the most expensive purchase you will make in your entire life! You need to do research and be prepared. You want to go with the best lender you can find!
It is too common for a lender to ask very basic information, receive no documentation, and possibly not even pull credit to provide a pre-qualification. This mortgage pre-qualification may sound good at the beginning, but no one is going to accept an offer on a house with a pre-qualification. At this point the bank has received very basic information from you, and has not yet verified your income, debt to income ratio or W-2’s.
Reading this, you’re probably thinking “Why wouldn’t someone get pre approved first every time?” You would be right, it should be the very first step. Now, we get that buying a home is a lot more exciting than the approval. There’s nothing wrong with window shopping online for houses. But the way to go is to become a strong, qualified, and prepared buyer. That begins with the mortgage pre-approval and pre-approval letter.
Providing documentation up-front can turn a weak pre-qualification into a solid mortgage pre approval. Then, a buyer is able to shop with confidence knowing the price range, what price equals what payment, and more.
Common Documentation to submit to get a Pre-approval
Photo ID
Most recent paystub
Last 2 years W2’s and possibly tax returns
Two most recent bank, retirement, or other asset statements
Rental reference
Keep in mind that not all approvals require all of the above. Often, only 1 year of W2’s are required or with active military, no W2’s are required. Yet, some buyer scenarios are more complicated and require additional documentation. This is one of the many reasons to know exactly where you stand up-front. Then, barring the loss of a job or issue with the home, there is a very high chance of the purchase closing.