When you are ready to complete your full mortgage application, it is essential to know what you need to apply for a loan. A pre-approval has a lower standard of proof and usually does not require you to present the lender with all of your documentation.
What Do You Need To Apply For A Mortgage? These are the items you’ll need when you apply for a loan:
- Photo ID & Social Security Card
- Current & historic employment details
- Proof of income & assets
- Written evidence to explain any recent large deposits to your account
- Tax returns
- Bank Statements
You will also need to “pass” a credit check and, before closing the lender will require:
- A signed sales agreement
- Proof of home insurance
- A Fully Completed Application Form
It is crucial to understand the importance of having up to date copies of these documents available for when your loan officer requests them. Failure to provide these items promptly can lead to your application being canceled or denied. Lenders are processing multiple applications at a time and will not wait for applicants who do not have themselves organized.
Nowadays, most lenders will ask for:
- Home Address
- Home telephone number
- Mobile number
- Work number
- Personal e-mail address
You should also be prepared to provide proof of your home address. This means an item such as a utility bill or other “official” document.
Usually a government-issued item such as a drivers license or passport.
Social Security Number
The lender will need your social security number in order to obtain your credit report. This will ensure that the lender receives the details of the correct person. You will not only be asked for your social security number, but you will also be asked to present your social security card.
Employer Contact Information
This will generally ask for details of your role, how long you have been with the company or organization, how much you earn, and whether this is a salaried position or whether any of your income is paid as a result of tips, commissions or any other variables.
Proof Of Income
You will be asked to show the last two or three months worth in order to prove your current income. If you do not have these, make sure you get copies before you submit your application.
Proof Of Assets
This will include any assets such as stocks, bonds, and life insurance policies, as well as any documentation of items such as 401(k).
This is done to check your financial stability, that you haven’t suddenly deposited a significant amount of money in your account without explanation, and to ensure you have enough money in your account to cover several months worth of bill payments should your income drop or disappear.
Lenders can request a copy of your tax returns directly from the IRS. To do so, they will ask you to complete a form 4506-T so if you are asked to do so complete and submit this form as soon as possible.
Your Credit History
This is a critical piece of the loan process and something you should have addressed in advance of your application. The lender will ask for your consent to perform a credit check. If there are any negative items on your report, you should have an explanation prepared ahead of time.
If you are currently receiving a pension, then the lender will ask for the award letter you received from your pension provider when you retired. If you no longer have this, you will need to obtain another copy from your pension provider or ask your lender if a letter from your provider would be sufficient.
When you are purchasing a home, and you already own your own abode, the lender can look at your history of loan payments for reassurance that you pay regularly and on time. However, if you do not already own a home and you are currently a renter, the lender may ask for documentation from your landlord to show you pay your rent on time.