If you’re buying a home for the first time, it’s important to get pre-approval for your mortgage.
Obtaining pre-approval allows you to know just how much home you can realistically afford, saving you time, as well as disappointment if you find out your dream home is out of financial reach.
Before you do anything else, access your free credit report to dispute any errors before you start collecting pre-approval documents. Then:
- Gather your (and anyone else applying for the mortgage) last two years of tax returns and proof of income (W2s or pay stubs)—or your year-to-date profit and loss statement if self-employed.
- Make sure you have down payment money and closing money available in your bank account.
- If the down payment and closing money were a gift, be ready to explain it.
- If you rent, put together the last 12 months of proof (like check copies and money order receipts) showing you’ve been on time with rent payments. Also ask your landlord for a written referral.
- Gather two forms of government identification, such as a driver’s license and passport. Also have other personal paperwork, like copies of divorce papers, if applicable.
- Provide proof of regular income from all forms including Social Security, child support or government assistance. Gather pay stubs, or, if self-employed, profit-and-loss statements.
- Provide proof of account balances for IRAs and retirement accounts.
- Disclose money held in the stock market.
- Include proof of other property you own.
- Disclose past financial issues like bankruptcy. Provide a written explanation and steps you have taken to correct your situation.
- Keep your credit score healthy. Do not: Apply for new credit, take on new debts or make large purchases, cancel any current credit accounts or ask a creditor to lower your limit. If you apply for a mortgage loan with an excellent credit score and the score goes down during the pre-approval or mortgage process, you may not qualify for the loan.
ReMax Real Estate Concepts
120 N 2nd Avenue West
Newton, IA 50208