Meeting with a Mortgage Lender

Here are some of the items you’re going to need to dig up before meeting with your financial institution about obtaining a mortgageSo, you’re looking to buy a home? Congratulations should be in order, but first, you have to be approved for a mortgage. This is a big deal, as lenders now require documents logging nearly every facet of your financial life — from taxable income and assets to rent payments and much more. Here are some of the items you’re going to need to dig up before meeting with your financial institution about obtaining a mortgage.

Income verification

This includes paycheck stubs, original or printed from online if paid electronically, and W-2s.

“Loan guidelines typically specify one month of verified income…and require the most recent Form W-2, but some borrowers are asked for two years of W-2s,” it read on financial publisher

Financial Institution, investment and tax documents

Nowadays, 30 days’ worth of financial institution and investment information must now be supplied to borrowers in most cases. However, for large loans, they could request up to three months of statements. In addition, expect to provide a recent tax return, including all the pages and schedules. Don’t even think about trying to cross out, white out or alter any information on any of your documents; it will invalidate them. Not only could that get your loan request denied, it might also put you behind bars if considered tax fraud.

“Tax returns are scrutinized for unreimbursed employee business expenses, self-employment business losses and telltale signs of loan fraud, such as reported income that doesn’t match an employee’s W-2,” said, adding that borrowers must also sign IRS Form 4506-T to allow lenders to receive a transcript of the tax return.

Profit-and-loss statement

If you are self-employed and run your own business, you will most likely have to submit a current-year profit-and-loss statement.

Here are some of the items you’re going to need to dig up before meeting with your financial institution about obtaining a mortgageRental property income

Similarly, if you own investment property and receive income from rents, you will need to show that documentation. It has to be shown on your tax return, and can be proven with canceled rent checks and financial institution statements showing the deposits.

Homeowners planning to buy a new home and rent out their current residence have even more homework to prepare. They must provide a rental agreement, canceled rent checks and financial institution statements, and also need to have at least 30 percent equity in their current residence. According to Bankrate, an appraisal might be required at the borrower’s expense.

Gift letter & corresponding paper trail (if receiving help with the down payment)

Borrowers who receive aid from family in the form of cash to go toward their down payment should be prepared to provide a letter from the “giftor” stating that the gift is just that and not a loan.

More difficult to provide is a copy of the “giftor’s” financial institution statement showing the funds, a canceled check and the borrower’s own statement showing the funds, which may be required as well. This is problematic because sometimes people, including mom and dad, don’t like to hand out paperwork regarding their overall financial wellbeing, even if it is to their kids.

Other documentation

Current renters must either supply 12 months of canceled rent checks and financial institution statements or provide contact information for the landlord who can verify payment was received in full and on time. Where applicable, borrowers may also have to show a copy of a divorce decree, proof of a child’s age if child support is counted as income, bankruptcy discharge papers and/or official letters that explain negative items on a credit reportfor example.

Another thing to consider when preparing to meet with your financial institution is to bring complete forms of every document. Provide every single page of every document, even if there’s a blank page. If a paper says there should be five pages there, the lender will want to see all five of them regardless, just to be sure.

Furthermore, these “official”-type documents expire after 60 days in the eyes of the lender, so stay ready to supply updated documents where applicable if your home search goes longer than you expected. At that time, financial institutions will need more recent paychecks and the like.

If you have any questions before meeting with your lender or throughout the entire home-buying process, don’t hesitate to call one of our loan officers for clarification.


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