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Basics Of Applying For a Home Mortgage
When you go into your lending institution, ready to finalize the paperwork on your home mortgage, what should you have ready? What needs to be done before you ever walk into that door? In the past home mortgage lenders would mail out verification to the borrower’s employer, banks, other home mortgage companies, insurance company, among others. This would be done to verify the information supplied by you on the home mortgage application. Now things have been streamlined to move faster.
A more common procedure these days is something called “alternate documentation.” This means that the home mortgage lender can use your responses and accompanying documentation as the verification. This allows your home mortgage to be processed more quickly without so much waiting around. Instead of waiting around for weeks for the verification to come in, more trust is placed on your documentation. Verifications are still mailed by the home mortgage company but that is mostly a quality control procedure.
To provide proof of your income, expect to bring in multiple forms. Some of these you may need to go to your employer for. You will need at least the past two years W2 forms; you may still have these in your tax records. Keep your pay stubs to cover at least a 30-day period; this will establish your ability to pay your home mortgage right now. If you are retired, you will need a Pension Award letter and Social Security Award letters if you get Social Security. Two past federal tax returns may be required if you meet a few extra conditions. These include being self-employed or if you own rental property. These documents are probably the most important part of getting your home mortgage and a low mortgage rate.
If you have any assets, the home mortgage company will want to know about that too. Provide statements for at least two months on all bank accounts, stocks, mutual funds, and bonds. Obtain a copy of your latest 401k statement, or any other retirement asset you may have. If there are any large deposits you will need to explain them or risk not having your home mortgage approved. Any money that will be coming to you as a gift for the home mortgage will need to be documented with a gift letter. Keep in mind that printed copies of these documents will not be accepted by a lot of lenders, you need something with your name, the account number and the institution’s name.
Any negative items on your credit report should be reported to the home mortgage company now. Otherwise you will likely get higher mortgage rates. Any late payments, recent credit inquiries, charge-offs, collections, judgments, and liens need to be explained. Also if you have a bankruptcy within seven years, provide that paperwork as well. Bring all of this with you and you should have no problem finalizing your home mortgage loan.