Cut Down on the Worry and Wait with Advanced Preparation
When you’re searching for your first home, there’s a lot to consider and plan for, and it can sometimes feel overwhelming. The good news is that there’s a way to eliminate some of the stress before you even start looking at prospective homes: prepare your financial paperwork.
If, like many people, you haven’t saved all of your records in one place, it’s a good idea to start now to reduce wait time and ambiguity during the mortgage process. Though Open Mortgage loan originators will do everything they can to close a loan quickly and efficiently, having your documents ready could make the process faster and smoother. Here’s a list of what to prepare.
Lenders need to know that you can responsibly cover your mortgage payments, so they’ll need proof of your past income, savings, and assets. These include:
- Two most recent pay stubs
- Last two years’ W2 forms
- Two months of bank statements
- Proof of investment assets and insurance
- Any other sources of income not on a W2
- If you’re self-employed or in contract work, you’ll want to prepare three to four years of W2s and 1099 forms. If you have any other source of income not documented on a W2 (such as child support), prepare proof of those deposits as well.
- Gift Funds
- Gift funds are allowed on select mortgage products, and vary in what is allowed from product to product. If your specific loan falls under this umbrella and you have generous friends or family supporting you in your home buying efforts with a monetary gift, ask them for a letter that documents how much they are giving and their relationship to you. Note that it’s important that they specify the money as a gift, rather than a loan.
- Rental history
- If you’ve previously been a renter, it helps to show that you’ve responsibly paid monthly rent. Any documentation that can prove you paid in full and on time every month, such as a year of canceled checks, or a letter from your landlord, is a proactive way to prove you’re a good mortgage risk.
If you’re in the market for a new home or just a new mortgage, we can answer your questions and set you up with the right loan for you. Contact us today.