When it comes to buying a home, you should start with thinking about what you need to apply for a home loan.
For many, 2015 will be the year they realize the American dream of becoming a home owner. The general mindset I run into is folks will start the home search and even start interviewing REALTORS® before the most vital step…getting their home loan. The process to apply for a home loan is rarely enjoyable and often times overwhelming. Knowing the items you need and the expectations of your lender can go a very long way to making the home buying experience as seamless as possible.
Below is a short list I give all my prospective new homeowners so they are prepared for the process and completely aware of the ‘Hoops’ they may have to jump through when they apply for a home loan.
5 Things you Need to Apply for a Home Loan
In no particular order, my preferred lender partner has made for me an itemized list of what they need to start the application process.
Keep in mind that a pre-qualified checklist versus a pre-approval checklist are as different as night and day…particularly when it comes time to make an offer. In most cases, a pre-approved buyer stands a much better chance to get their offer accepted and thusly, the need for all my buyers to already have their home loan process well in hand before we ever step foot in any home for sale.
1. Income –
- Pay stubs: Of course you’ll need to document and have copies of your pay stubs. And if you are adding your spouse or partner on the purchase and sale, you’ll need their stuff too.
- W-2 statements from the past 2 years: This time of the year, we talk about those good ole W-2’s! So, it should be easy to offer those up. If you have trouble locating those, give your accountant a buzz…they’ll have ’em!
- Tax returns: It stands to reason that you’ll also be asked to provide your last two years’ tax returns and likely the IRS Form 4506T as well.
Self-employed or paid on commission like me?
- Make sure you have your Year-to-date profit and loss statement and balance sheets! This is not usually for the “DIY’ers” as I’ve learned so make sure you have something prepared and signed by you and your accountant!
- This may sound like a bit of overkill but also be sure you have signed tax returns for the last 2 reporting years for both your personal as well as business. And no photo copies either…they have to be the originals!
2. Other Income Sources –
Don’t forget about all those extras you get throughout the year. These will include:
- Social Security
- Disability payments
- Pension income
- Child support and or Alimony
- Bonuses from your job
- Rental property income from any real estate you own
- Yep, get those Bank account statements ready and have at least the last 3 months ready to go
- Any Stocks or life insurance assets need to be available too
- Did you get a sizable ‘Gift’ from a family member this Holiday? I have a full list of what you need for your lender in a previous post…Here is the link
- Car loans
- Outstanding student loans
- Credit card accounts
- Any current mortgages
- Home equity lines of credit
- Social Security number
- A list of your addresses from the last two years
- And if you were a full-time student during the past 2 years, you’ll need to provide a transcript or Diploma
Knowing what you need to apply for a Home Loan can go a long way in making you a stronger home buyer!
I hope this information was helpful for you. I know the heartache when folks run up against issues like getting a home loan during the excitement of the home buying process but with proper planning and knowing what you need, the dream of home ownership will be yours…and I’d be honored to help you along the way.
I am passionate about Real Estate and eager to answer all of your real estate questions! Text or Call me at 360-880-2356 or email me directly to ask about Buying, Selling or Investing in today's Real Estate Market - serving Lewis County & Thurston County, WA.
Certified Residential Specialist | Real
Mountain Valley Real Estate