Mortgage Pre-Approvals & Loan Apps: What You Need

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What you need for a Mortgage Pre-Approval & Loan Application

Applying for a personal loan online and providing necessary documents is an easy process that can result in same-day funding, depending on the lender. If you're planning to buy this year, the first step (after finding your realtor) is to get yourself a realistic mortgage pre-approval to give yourself a budget when searching for your new home. After you get a pre-approval you can shop different lenders to find the best rate. 

Different lenders ask for different documents to complete their underwriting process. However, most companies want to evaluate basic financial and personal information, including your credit score, income history, address, and current debt obligations. Some information, such as your credit, can be easily obtained by potential lenders—but other information you must provide. Here is list of documents most lender's will ask for:

- 3 months’ bank statements on all accounts, including 401k

- Copy of Social Security Card and driver’s license

- Last two years’ W2 forms

- Most recent pay stubs covering a 30 day period

- Landlord’s name, address, and phone number

- Federal tax returns (1040’s) for the last two years, especially if  you are self-employed; earn regular income from capital gains; earn sizable interest income; earn more than 25% of your income from commissions or bonuses; own rental property; or you take non-reimbursed business expenses.

- Explanations for late payments; credit inquiries in the last 90 days; charge-offs; collections; judgments; liens

- Receipt for child support payments, whether it is debt or income

- Receipts of alimony payments 

- Receipts of rental property income 

- Copy of HUD1 Settlement Statement on recent sales of any homes you have recently owned

- Gift letter (for funds from family members); donor’s bank statement; copy of gift check; copy of deposit receipt

- Copy of bankruptcy papers filed within the last seven years

- Year-to-Date Profit and Loss Statement if you are self employed

- Corporate or Partnership tax returns (if you own more than 25% of a business)

- Copy of Divorce Settlement

If you get turned down for a personal loan, one option is to apply with a cosigner, such as a family member or friend who has good credit and income that could help you qualify for a personal loan with the best interest rate and terms. Another is to try another lender, different banks offer different loan products and qualifications. 

Need help choosing a lender? Ask your realtor, they should have a group of various lenders to choose from that can meet your specific financial needs. You can also visit our partners page for a list of our trusted mortgage industry professionals.