Mortgage providers require documents that verify your employment status, income, creditworthiness, and overall financial situation. If you’re applying with a spouse, your spouse will also need to provide this information.
What Documents Should I Prepare Before Filling Out An Application?
Identification. Mortgage providers will run a credit check. Provide a driver’s license or state I.D., your Social Security Number, and authorize the lender to request a credit report.
Proof of income. Show your W-2s, paychecks, or 1099s for the past two years. If you run a business, your lender will ask for your profit and loss statements.
Tax information. Put together copies of your federal and state tax returns for the past two years.
Debt-to-income-ratio. Your lender needs to see documentation regarding your current debts to calculate your debt-to-income ratio.
Print documents that show minimum monthly payments and current balances on your credit cards, loans, student loans, child support payments, and any other debt.
List of assets. Show your most recent bank statements and document everything you possess, including properties, vehicles, or investments.
You can speed up the approval process and secure a better rate by working on your finances ahead of applying for a mortgage.
Here Are Some Steps To Help You Qualify For A Low-Interest Rate Mortgage
Raise your credit score. Request your credit report, go over it carefully, and report any mistakes you spot. Boost your credit score by using your credit cards regularly and paying off the balance monthly.
Use your credit sparingly once you have a good score. Avoid purchasing a new insurance policy or applying for a credit line within the few months that precede your mortgage application.
Get your debt under control. Take care of paying off old debts and consolidate existing debts if you need to.
Lower your debt-to-income ratio. Ideally, your monthly combined loan and credit card payments should not exceed 25% of your income. Look into boosting your income, if you need to, with an additional part-time job or self-employment income.
Put money aside for a down payment on your new home. For your best results when mortgage shopping, put away enough money ahead of time to cover 20% of the value of your new home.
Ask yourself what kind of mortgage is best for you, and how much you can afford to spend on monthly payments. This will help you avoid borrowing more than you need or can afford to pay back.
