Home Loan Qualifying Checklist
Step 1. Complete the mortgage application
The first step toward securing a home loan is the completion of a standard 1003 mortgage application. The application provides a comprehensive overview of the borrower's financial status, and allows the lender to make an informed decision about your ability to repay the loan.
Step 2. Supply documentation
Before you meet with your Mortgage Professional to fill out the application, gather the documents and information you'll need to complete the paperwork, such as:
- 2 years W2s and/or 1099s
- Most current pay stub
- Social Security number(s)
- Most recent 2 months statements for all bank accounts, including checking, savings, brokerage accounts, and IRAs
- Credit card suppliers, account numbers and balances
- A complete list of assets, including stocks, bonds, cars, life insurance and estimated value of furniture
- Residence and employment addresses for the past 2 years
Depending on the individual, other paperwork may be required, such as a final divorce decree, alimony or child support documentation, Social Security entitlement, or information about additional real estate owned.
Step 3. Credit report is reviewed
Your Mortgage Professional will pull a credit report detailing your personal credit history. The report will include an overall credit score, and the lender will rely on your score to assess your willingness to repay the loan.
Step 4. Obtain pre-approval
Next, your Mortgage Professional will assess your financial position and credit and advise you of the maximum loan amount you qualify for. This information can be used to arrive at a maximum purchase price for a home, as well as a projected monthly payment amount.
A prequalification or pre-approval letter will be issued, and can be included with any offer made to purchase a home. This will strengthen your position with the seller, as they will understand you are already working with a lender and have obtained approval for a home loan.
Step 5. Income and assets are verified
Now that you have provided documentation and a credit report has been pulled, Your Mortgage Professional will begin the process of verifying all the information provided. Certain questions may arise and require additional documentation, such as a gap in employment history.