What Should I Do To Prepare To Apply For a Loan?
A crucial step in starting your search for a new home is having a clear idea of your financial situation. By getting a handle on your income, expenses and debts, you’ll have a much better idea of what you can afford and how much you’ll need to borrow.
For lenders to verify this information, they’re going to need to look at your financial records. It is also important to remember that you should include records for each person who will be an owner of the house. Make sure you’ll be able to provide copies of these important documents:
12 Months Cancelled Checks For Mortgage and/or Rent
Remember that lenders are most interested in your average income. Not only will they want to see this month’s paycheck, but also how much you’ve been making for the past two years. Steady employment is also more attractive to lenders, so if you’ve been hopping from job to job, be prepared to discuss the reasons why.
In order to qualify you for a loan, most lenders will also ask you for copies of your bank statements. Ideally, they’d like to see a steady history of savings, or at the very least, that you’re not bouncing checks.
It’s always a good idea to save copies of your tax returns, especially if you’re self-employed. It you own your own business, it’s important to note that lenders generally consider your income as the amount you paid taxes on, not the gross income of the business. If you’re self-employed, you will need to include the last two years’ tax returns, with all schedules, plus year-to-date profit and loss statements and balance sheets.
Dividends & Investments
Lenders will usually consider long-term investment dividends, as well as your investment portfolio, when evaluating your income.
If you receive steady payments as part of a divorce settlement or for child support, you can also include this as part of your gross income. Just remember that lenders will want to see a copy of your divorce/court settlement verifying the amount of the payments.
Green Card For Resident Aliens
Social Security Card and Photo I.D.