The first step towards getting a mortgage is a pre-approval. This checklist has a few things that you will need to move forward on the home-buying process.
Check your credit score. (Free Credit Report: creditkarma.com)
Address any disputes, issues or questions regarding your credit report.
YOUR CREDIT IS IMPORTANT FOR PREAPPROVAL. DO NOT DO THE FOLLOWING DURING THE PROCESS:
Apply for new credit.
Take on new debts or make large purchases.
Cancel any current credit accounts.
Ask a creditor to lower your limit.
Make sure all individuals applying for the mortgage have the following documents from the past two years:
tax returns and proof of income (W2s or pay stubs)
year-to-date profit and lost statement (self-employed)
Have your down payment/closing money already in the bank.
FOR CURRENT RENTERS: Have proof for the last 12 months that you have paid rent on time (check copies/money order receipts). You should also have a written referral from your landlord in regards to you as a tenant.
Two forms of government identification and any other personal documentation you may need to provide for the lender. (marriage records, divorce papers etc.)
Proof of regular income from all forms including Social Security, child support or government assistance.
Proof of account balances for IRAs and retirement accounts.
Show proof of money held in the stock market.
FOR CURRENT/PREVIOUS HOME OWNERS: Bring proof of other property currently or previously owned.
Disclose past financial issues (bankruptcy etc) along with a written explanation of what happened and how the situation has been addressed or corrected.
The modern mortgage market offers a variety of mortgage loans catering to the needs of homebuyers. The titles and details of these plans can become confusing, especially as new types are introduced continuously. You can make sense of these loan types, however, if you understand the basic principles that govern all mortgage loans. Again, you can look to your real estate professional for assistance.