7 Pieces of Paperwork to Have In-Hand Before Talking to a Mortgage Lender

Meeting With a Lender Like any other financial process, there are certain items that you should have to make the home buying process go more smoothly. Purchasing a home is typically not a quick process that is completed in a short amount of time. Instead, it tends to occur in different stages that often overlap.

In fact, the preparations for buying a home in Blaine can begin long before you ever even begin looking for a new home. Gather the following pieces of financial paperwork now and avoid unnecessary delays when speaking with a lender. 

1. Government-issued Identification

For most people, their government-issued identification is going to be their state drivers license – though some might have an ID card instead.

Though the rules may vary depending on the lender you use, ensuring that your ID is current and not out of date is a good idea. Also, make sure it is valid in the state in which you currently live. For example, if you are moving into an Anoka home for sale, obtain a new drivers license in Minnesota before applying for a mortgage.

2. Proof of Employment

Many people are uncomfortable about revealing certain aspects of their lives to virtual strangers. Be open and honest about the length of your employment as well as the amount of money you make during a given period. In most cases, this information will come in the form of paycheck stubs and W-2.

Plan to gather your W-2 forms from the past couple of years and your paycheck stubs for the past few months. If the paystubs are sent electronically, be sure and print them out.

3. Profit and Loss Statements

Usually, profit and loss statements are only necessary if you are self employed or have your own business. If you obtain your income from your business and you don’t have profit and loss statements, expect the lending officer to either ask that they be prepared or they may request to see any 1099 forms and/or bank statements from the past few years.

4. Federal Tax Returns

While you can expect to have to provide at least your most recent federal tax return, some lenders may require two or three year’s worth of documentation of your wages. Be sure and give them the entire return, which may include all of the various schedules and pages that you are required to fill out when you file.

Expect your lender to carefully examine your tax return to look for business expenses that aren’t being reimbursed, reported income that does not match to the form W-2’s and other discrepancies.

Be prepared to sign an IRS Form 4506-T. Signing this form will enable the lending officer to request a transcript of your tax return directly from the Internal Revenue Service (IRS). Your lender will use it to compare to the copy that you filed with the IRS and offered to him or her. According, the tax form you supply to the mortgage lender sould be the same as the one sent from the IRS.

5. Comprehensive List of Your Debts

It is important to your lender to know the debts you are obligated to pay as well as the time frames of any loans. Examples of debt might include student loans, child support payments, credit cards, car loans and the like. This information will be used to determine your debt-to-income ratio when buying Minneapolis real estate. The amount of debt that you are responsible for each month is weighed against your income to determine if those figures meet the lender’s parameters.

From the lender’s standpoint, the lower debt-to-income ratio you have, the better chance you will be able to pay the mortgage. In other words, your income will be more than enough to pay the new mortgage as well as the existing debt obligations. While the typical debt-to-income is around 36 percent, each lender is different so this number could vary.

6. Complete List of Assets

Your assets could include the following: cash in the bank, mutual funds, real estate titles, investments, checking accounts, brokerage holdings, automobile titles, savings accounts and any other investments. Bring any statements or other types of paperwork that proves you own these assets when you arrive at your appointment. Expect the lending officer to cross-reference this information with your banking statements to ensure that they match.

The primary reason for this step is for the lender to ensure that you not only have enough money for the down payment, points and closing costs when buying a home, but that your assets are sufficient enough to cover your monthly mortgage payments as well as your other obligations.

7. Credit Report

While your credit report is not a necessity at your appointment with your lending officer, he or she may order one that stays with your file anyway. Therefore, it is a good idea for you order your own copy prior to the meeting. That way you will know exactly what your credit report says before the meeting. Once you get your credit report, examine it for any errors or missing information. Remember, you are entitled to one free credit report from each of the three credit bureaus each year.

The above information is a guideline to help you prepare for your meeting with a mortgage lending officer. While some financial institutions will not ask for all of the information mentioned — and others will ask for additional paperwork, this list should provide you with a beginning basis from which to prepare.

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