To get pre-approved for a mortgage, you need to provide your lender with documentation that verifies your financial situation. This allows the lender to assess your ability to repay the loan and determine how much you can borrow. Here’s what you’ll typically need to submit:
1. Personal Identification
- Driver’s License or State ID: To verify your identity.
- Social Security Number (SSN): For a credit check and identification purposes.
2. Income Verification
- Pay Stubs: Usually, your two most recent pay stubs are required to verify your income and employment.
- W-2 Forms: The last two years of W-2s from your employer to confirm your income history.
- Tax Returns: You may need to provide your last two years of tax returns, especially if you have income from bonuses, commissions, or are self-employed.
- Additional Income Documentation: If you have other sources of income, such as rental income, bonuses, child support, or alimony, you’ll need to provide documentation for these as well.
3. Proof of Employment
- Employment Verification: The lender may contact your employer to verify your employment status and confirm your salary.
- Employment History: You may need to provide information on your employment history, typically covering the past two years.
4. Credit Information
- Credit Report Authorization: Lenders will need permission to pull your credit report to assess your credit history and score. Your credit score will help determine the interest rate and loan terms you qualify for.
- Explanation of Credit Issues (if any): If there are any issues on your credit report, such as late payments or collections, you may need to explain them.
5. Assets and Bank Statements
- Recent Bank Statements: Lenders will typically request the last two months of bank statements to verify you have enough funds for the down payment, closing costs, and cash reserves.
- Retirement and Investment Accounts: Statements from 401(k), IRA, or other investment accounts may be requested to verify additional assets.
- Proof of Large Deposits: If there are large deposits in your accounts, you’ll need to explain where the money came from (e.g., gifts, sale of assets).
6. Debt Information
- List of Monthly Debts: Include payments for student loans, car loans, credit cards, and any other debts. This helps the lender calculate your debt-to-income (DTI) ratio.
- Current Loan Statements: If you have existing loans, providing recent statements can help verify your monthly obligations.
7. Additional Documentation for Self-Employed Borrowers
- Profit and Loss Statements: Self-employed individuals may need to provide year-to-date profit and loss statements to verify income.
- Business Tax Returns: Typically, the last two years of business tax returns are required.
- Other Business Documentation: Lenders may ask for additional documents, such as business licenses or a letter from an accountant.
8. Gift Letters (if applicable)
- Gift Letter for Down Payment Funds: If you’re using gifted money for the down payment, the person giving the gift must provide a letter stating that the funds are a gift and do not need to be repaid.
Providing these documents helps the lender evaluate your financial situation and issue a pre-approval letter, which shows sellers that you’re a qualified buyer and can obtain a mortgage for the specified amount.
