The road to homeownership, AKA securing a mortgage or pre-approval letter, is paved with … paperwork.
First, avoid surprises—especially unpleasant ones—by getting your credit reports/FICO scores before the first sit-down with a banker. You are entitled to a free annual one. Check with any of the big three credit bureaus (Equifax, Experian or Transunion).
Proof of employment is next. Advise your boss to expect a verification of employment form. You will also need to submit two weeks’ to a month’s worth of pay stubs.
To prove that you can pay back the loan, banks want to see how much money you earn regularly. That means two years of federal tax returns and W-2s.
What you owe—and yes, lenders will ask—is the flip side of income. Outline your expenses, which most definitely include monthlies for rent, utilities, that new car, credit cards, child support, etc.
Asset verification requires documentation, too. This includes at least three months of bank statements. Investment accounts with bonds, stocks, mutual funds, etc. are also part of this, as are the titles of any cars you own if they are less than five years old. That you have funds for the security deposit is required, too.
The lender will also want a fully executed Purchase & Sale Agreement (signed and initialed by buyer and seller). Make certain the property address is correct.
Don’t forget the obvious: a valid ID and your Social Security number.
Final tip: Never turn in originals, and keep a copy of every piece of paper you send out so when the inevitable call arrives: “I don’t have…”, you will.