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What Documents Are Needed For Mortgage Pre Approval

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What documents are needed for mortgage pre-approval?

You want to ensure you get the best rate for your loan, and every lender has different rate options and guidelines. One option to consider is working with an experienced, local credit union. Credit unions are the best financial institution in terms of providing trusted and affordable mortgage services.

Other Documents Showing Income

When you apply for pre-approval, your lender should have an accurate look at your finances.

One of the ways you do this is by providing proof of other income that you may have.

Do you receive Social Security benefits, pension payments, child support or alimony payments?

If you have any of these, you should gather documents that provide proof of this for presentation to your prospective lender.

If you receive dividend income from stocks you own or checks from trust funds, these are also things to consider outside of your brokerage accounts.

If you have a lot of different accounts, a helpful tip is to pull out a sheet of paper and write down all the accounts that you can think of that are in your name.

This way you are being careful not to overlook accounts that your prospective lender needs to know about as part of the pre-approval process.

A Final Mortgage Loan Documents Checklist

As you locate and organize your documents, cross-check your stack of paperwork against this checklist to make sure your lender will have all the information they need:

  • 2 years of tax returns
  • W-2s from the past 2 years
  • Recent pay stubs
  • 1099 forms and profit and loss statements for self-employed individuals
  • Divorce decrees verifying alimony and child support payments
  • Proof of social security or disability income
  • Bank account statements
  • Stock or bond account statements
  • Retirement account statements
  • Proof of gift funds and gift letters
  • Documents for the sale of assets
  • Proof of outstanding, long-term debts
  • Letters of explanation for credit mishaps
  • Documented rent payments for current renters

Of course, youll also need to assemble your actual mortgage application, which will include additional information about your current financial standings and the real estate youre looking to purchase. Similar to other large purchases, your lender will likely verify your identity with a photo ID, so its a good idea to have one readily available with the rest of your documents.

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If You Get Declined For Your Preapproval Dont Despair

  • Find out why you were declined, so you can figure out what to do to improve your chances of getting a loan in the future.
  • Ask the lender to explain why you were declined. Was your credit score too low? Was there specific negative information on your credit report?
  • Ask to see a copy of the credit score the lender used. If the lender used your credit score to deny your preapproval request, the lender must send you a notice with the credit score they used to make the decision and instructions on how to get a free copy of your credit report.
  • If there are errors on your credit report, get them corrected.
  • If you need help improving your credit, contact a HUD-approved housing counselor. You can find a counselor online or by calling 1-800-569-4287.

Documents You Need To Qualify For A Mortgage

Documents Needed for a Mortgage Pre

KIKI BERG | Nov 24, 2017

Being fully pre-approved means that the lender has agreed to have you as a client and the lender has reviewed, approved ALL your income and down payment documents prior to you going house hunting. Many bankers will say youre approved, you go out shopping and then they sorry youre not approved due to some factor. Get a pre-approval in writing! It should have your amount, rate, term, payment and date it expires.

Excited! Of course you are, you are venturing into your first or possibly your next biggest loan application and investment of you life.

What documents are required to APPROVE your mortgage?

Being prepared with the RIGHT DOCUMENTS when you want to qualify your mortgage is HUGE just like applying for a job or going for a job interview. Come prepared or dont get hired .

Why is this important?

You can have a leg up against the competition when buying your dream home as you can have very short timeline for financing subjects.Think? Youre the seller and you know the buyer doesnt have to run around finding financing and the deal may fall apart? This is the #1 reason deals DO fall apart. You will likely get the home over someone who isnt fully approved and has to have financing subjects. The home is yours and nobodys time is wasted.

Read carefully and note the details of each requirement to prevent you from pulling your hair out later.

Here is the list for the average T4 full-time working person with 5-15% as their down payment :

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Whats Needed By The Lender For An Investment Property Purchase

If you are buying a property that you intend to rent, such as a multi-family, the records you need for pre-approval will include:

  • Identification
  • A valid drivers license
  • A passport
  • An official state or federal ID
  • Income
  • 30 days of pay stubs
  • Your previous two federal tax returns
  • Your last two W-2s or previous two 1099s
  • Proof of additional incomesuch as alimony or social security
  • Finance Accounts
  • Bank statements for the last two statement periods
  • Investment and retirement account statements
  • Property you own
  • Settlement statement for recent home sales
  • Recent statements for mortgages you have on other properties
  • Proof of insurance for all your properties
  • Current leases for all your rental properties
  • Additional documents
  • Gift letter from any family helping with payment
  • Landlord contact information for the last two years
  • Letter of explanation concerning issues like collections and other problems on your credit report
  • Divorce-related documents, if applicable
  • Benefits Of Getting Preapproved

    Before you start the house-hunting process, one of the first things youll want to do is get preapproved for a home loan. Getting preapproved for a mortgage is proof that a lender has approved you for a specific loan amount and purchase price.

    Getting preapproval is beneficial as you can figure out how large of a mortgage loan you can get. This makes it easier to set a price point so that you can find a home that meets your budget.

    Other benefits include:

    • Giving you confidence in your ability to obtain home financing
    • Showing your creditworthiness to sellers
    • Speeding up the process so you can get to closing faster

    While you may be less than excited to fill out even more paperwork, getting preapproved offers all sorts of advantages. Taking some time early on can save you weeks of delays in finally closing on your new home.

    Keep reading for information about how to get a preapproval letter for a mortgage.

    Also Check: Can You Get A Mortgage With A 550 Credit Score

    Mortgage Loan Preapproval Documents Checklist

    When submitting your mortgage loan application, youll need to provide all sorts of documentation. These documents are required to verify the personal and financial information that you put on your mortgage application.

    Lenders typically need the following documents before you can be preapproved for a mortgage:

    • Documents that verify your identification, such as a Social Security card, passport, or drivers license
    • Last two years W2 and 1099 forms
    • Profit and loss statement
    • Pay stubs for the last 30 days
    • Last two years tax returns
    • Statements from asset accounts, including bank and retirement accounts
    • Divorce decree or separation agreement
    • Landlord contact information for last two years

    Collecting these documents before filling out a mortgage application helps to speed up the process.

    Some lenders may be able to get some of these documents directly from your bank or employer. However, its best if you provide everything to ensure that the documents are correct and complete.

    What Do I Need To Get Pre

    Documents Needed for a Mortgage Pre-Approval

    Do you know the documents needed to get approved for a mortgage? Getting preapproved for a mortgage is a significant step in the home buying process.

    While pre-qualifying can seem appealing because it requires so much less work, pre-approval is way more likely to help you make a successful offer on a home.

    In other words, there is a difference between pre-qualification and pre-approval.

    Pre-approval shows that you are likely to get a mortgagewhile pre-qualification only indicates that there is a possibility that you could get a mortgage. Especially in competitive markets, pre-approval is a must-have before you start making offers.

    If you feel a little daunted by the amount of paperwork you have to gather and complete to get pre-approval, you are not alone. Most home loans require extensive paperwork. It will take you some time and effort to get everything ready and complete the application process.

    One serious bonus to going through the pre-approval process, though, is that you will be well-prepared for the actual mortgage application process. Most of what you do in pre-approval will apply to the official application.

    After picking a lender, this is precisely what they will be looking for to complete the application and pre-approval.

    Here is a list of documents you will need for most of the popular mortgage programs for buyers.

    Also Check: What You Need For A Mortgage

    Prepare For Your Closing

    Youre nearing the finish line just a few more things to do to prepare for your closing. Prior to closing youll receive a Closing Disclosure, or CD, from your lender showing the actual terms of the agreement and your final costs. Review these closing documents and if any questions arise, ask your lender.

    Youll also make arrangements for your down payment and closing costs. Plan to bring a cashiers check, photo ID and proof of homeowners insurance with you to your closing.

    Different Lenders May Request Different Levels Of Information And Documentation

    Some lenders base preapproval letters solely on the information you provide. Other lenders dig into the details with you now to make certain you have all the documentation you need and prevent delays and surprises later. Ask questions. All lenders will require documentation at some point if you decide to apply for a loan. Its better to know now that you need an additional document than when youre about to close.

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    Mortgage Approval: Heres The List Of Documents You Need

    Getting a mortgage pre-approval is one of the first and the most important steps in your journey to become a homeowner. Although it is not mandatory to have a pre-approval, it is recommended because it proves to the sellers that you have the finances to stand behind the offer you are making.

    If you have a good financial history, your chances of getting a mortgage approval are increased significantly. However, you need to provide the lender with certain documentation to verify that the financial information you are sharing is true.

    In this post, we will be sharing the list of documents required to get a mortgage pre-approval. Lets begin.

    What’s A Mortgage Pre

    Buying a Home? You

    Pre-approval establishes the mortgage amount you may qualify for. It also guarantees the interest rate for up to 120 days from the date of the certificate1, provided your financial situation doesn’t change. A CIBC mortgage pre-approval certificate is free with no obligation.

    Changes to your credit history such as a new car loan or paying off a student loan between the time you’re pre-approved and apply for your final approval could impact the mortgage amount you can afford.

    A mortgage pre-approval certificate provides:

    • A signal to sellers and real estate agents you’re a serious buyer
    • The security of negotiating a purchase price that fits comfortably within your budget
    • Negotiation leverage, especially during a bidding war
    • The ability to move fast to close the deal and finalize your mortgage

    Recommended Reading: How Much Can I Mortgage My House For

    Copies Of Any Court Orders

    When applying for a mortgage, you can also use alimony and child support payments for qualifying purposes.

    However, your lender will request copies of your divorce decree or other court orders to verify how much you receive in support payments.

    Theyre strict rules regarding whether youre able to use child support or alimony when buying a home.

    In most cases, you must have received these payments for at least six months before qualifying for a home loan.

    Also, payments must continue for at least three years after closing.

    Get Information From A Source You Trust

    It’s natural to have questions. Besides the basics such as the interest rate and term, it’s a good idea to ask about other things like prepayment charges if you plan to sell your property or pay down your mortgage loan faster. To ensure that you get accurate, actionable information we recommend seeking answers from a trusted source. TD Mortgage Advisors are well versed in every aspect of the mortgage process and can be an easily accessible source of information.

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    What To Do If A Lender Refuses Your Mortgage Application

    A lender could refuse you for a mortgage even if youve been preapproved.

    Before a lender approves your loan, theyll verify that the property you want meets certain standards. These standards will vary from lender to lender.

    Each lender sets their own lending guidelines and policies. A lender may refuse to grant you a mortgage if you have a poor credit history. There may be other reasons. If you dont get a mortgage, ask your lender about other options available to you.

    Other options may include:

    • approving you for a lower mortgage amount
    • charging you a higher interest rate on the mortgage
    • requiring that you provide a larger down payment
    • requiring that someone co-sign with you on the mortgage

    Documents Needed For Mortgage Pre

    Documents Needed for Mortgage Pre-Approval

    To begin the loan pre-approval process, youll want to have several documents ready for the lender.

    Its important to remember that the documents one lender requires may be different from those of another. Regardless, these are the most common documents requested when seeking mortgage pre-approval and should help you get started.

    Personal Information

    Age, marital status, number of kids and their age. Two pieces of government issued identification is a must.

    Expect to provide information on where youve lived over the past few years as well. That includes the details if youre renting or living with parents and have dependents .

    Social Insurance Number

    Verified through your SIN card, tax documents, or other official documents that show your SIN. The lender uses this to confirm your identify and acquire your credit report / score.

    Employment Information

    A list of your current and previous employers dating back two years or more. That includes their name, address and contact information. A lender wants to verify your employment.

    If youre self-employed, a statement of your finances from an accountant can be a good start. The lender may ask for more documentation such as tax statements to prove your self-employment and financials.

    Bank Information

    Have bank statements for each of your accounts prepared. Lenders want to make sure you have enough funds in your account to take care of extra costs associated with buying a home. Two examples are the down payment and closing costs.

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    What Is A Mortgage Preapproval

    When youre shopping for a mortgage, you can compare options offered by different lenders.

    Mortgage lenders have a process which may allow you to:

    • know the maximum amount of a mortgage you could qualify for
    • estimate your mortgage payments
    • lock in an interest rate for 60 to 130 days, depending on the lender

    The mortgage preapproval process may be divided in various steps. It may also be called mortgage prequalification or mortgage preauthorization. Different lenders have different definitions and criteria for each step they offer.

    During this process, the lender looks at your finances to find out the maximum amount they may lend you and at what interest rate. They ask for your personal information, various documents and they likely run a credit check.

    This process does not guarantee your approval for a mortgage.

    Documents Youll Need If You Already Own A Home

    If you already own a home and are applying for a mortgage to purchase an investment property or vacation home, youll need to provide recent mortgage statements for your current home. This will show the equity in your home, along with your principal balance and monthly payment. This information will help the lender determine your DTI and whether you can afford this mortgage payment. This is especially important if you have a mortgage on your current home and this will be a second mortgage.

    Recommended Reading: What’s An Average Mortgage Interest Rate

    What Documents Do I Need For Mortgage Preapproval

    The document requirements for mortgage preapproval vary by lender and your individual circumstances, but typically, you’ll need to provide documents which show your income, your assets and any regular commitments against your income. These will include, but may not be limited to:

    • Thirty days of pay stubs
    • Two years of federal tax returns
    • Sixty days or a quarterly statement of all asset accounts including your checking, savings and any investment accounts
    • Two years of W2s

    “If you have any unusual income or circumstances, you’ll need to provide other documents,” says Peter Boyle, a senior loan originator at Summit Mortgage Corporation in Plymouth, Minnesota. “For instance, if you’re divorced, I need to see a decree. If you filed bankruptcy, I need a full copy of the discharge documents. If you have rental income, I need a copy of the lease.”

    A mortgage preapproval can be “pretty painless,” says Turano, as long as you are prepared with appropriate documents.

    In addition to paperwork, your preapproval session with your lender should include a discussion about your down payment and loan options.

    How To Get Pre Approved For A Mortgage

    What Documents Do You Need for a Mortgage Pre

    Are you wondering how to get pre approved for a mortgage? Its one step in the home buying process you shouldnt overlook.

    Mortgage pre-approval means that a lender has conditionally approved you for a set home loan amount, based on your credit and finances. Having a mortgage pre-approval letter in your pocket can streamline the mortgage application process later since the lender already has your information and has verified your documents.

    Although some information can change and the lender may need to re-verify some of your documents, your credit standing cannot change during the commitment period without impacting your loan.

    Changes in the financial conditional and application information could jeopardize the approval status of the application. Avoid taking on additional credit obligations during this period.

    Additional contingencies may include an approval up to a maximum interest rate since the rate cannot be locked until the ratified purchase contract is received.

    A pre-approval can also give you an edge when youre ready to make an offer on your new home. The pre-approval shows sellers that youre committed to buying and that you can back up your offer with financing. In a bidding war, a pre-approved buyer may win over a buyer who hasnt started the application process.

    How to get pre approved for a mortgage starts with knowing what to expect.

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