There is nothing quite as exciting as buying a new home. For most buyers, it will be the biggest investment of your life. Still, there is also no denying that purchasing a home is a nerve-wrecking process because of the amount of time and paperwork that is inherent with a home purchase. Whether you are just venturing out to look at homes or if you already know what home you want to buy, purchasing a home does require some research and effort. Any time that you spend in preparation is well worth the effort because it will help the lending and closing processes go well.
Before you ever contact a mortgage lender, you need to take the time to get a copy of your credit report. After you get a copy, double-check it for any errors or possible problems. If you find an error, you need to get in touch with the creditor involved immediately to make sure that inaccurate items get fixed on your report. Even if you have a low credit score, it does not mean that you cannot get a home loan, but you may have to pay a higher interest rate.
Arrange Employment Documents to Secure a Quick Mortgage Approval
Once you have researched mortgage rates and chosen a lender, the lending agency will need to verify your employment through a Verification of Employment form. Contact your company's HR department and let them know that you are about to purchase a home. Ask that the representative watch for the arrival of the form and to send it back immediately.
Another set of records that you will need are your pay stubs. Make sure you give your lender copies and and hang on to the originals. You will also need the last two W2 forms that you have received from your employer. Your lender will also definitely need your tax returns from the last two years as well. If you have a co-applicant, all of these documents will be needed for that person also.
Make Sure to Gather Extra Necessary Documents
There are more pieces of paperwork that your lender is going to need. Most lenders want at least three months' worth of checking or savings account statements. Also bring copies of any assets such as retirement accounts, stocks, bonds, mutual funds and so on. Your lender is also going to have to verify your identity, so a copy of your driver's license or passport is also needed.
The last few steps are about getting organized for the closing and the final stages of mortgage approval. You will need to make a list of every account that you owe money on. Whether it is a student loan, a credit card, a car loan or some type of additional real estate purchase, you need to be ready with the knowledge of how much you owe on each account. Next, make copies of current statements for every account because many lenders will ask for a copy. You also need to determine how much cash you will have once you have paid your down payment. Be sure to also have a copy of your social security card. After you gather all of these materials, the rest of the process is a snap in comparison.
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