SECURING MORTGAGE PRE-APPROVAL? SUBMIT THESE DOCUMENTS!

Thinking of securing a mortgage pre-approval? Read this.

Every lender requires different documents for mortgage pre-approval, depending on the individual’s personal circumstance. But in most cases, a person needs to provide papers showing his income, assets, and regular commitments made against his salary.

The following documents are some of the usual requirements needed: paycheck within 30 days, federal tax returns for two years, quarterly statement of all asset accounts such as savings, investment, and checking accounts within 60 days, and W2s for two years.

For those with unusual income or situation, a person needs to give other documents, according to Peter Boyle, Senior Loan Originator at Summit Mortgage Corporation in Minnesota. So if a person is divorced, he needs to submit a decree to the lender; for bankruptcy, full documents of the discharge documents; and for rental income, copy of the lease.

Preparing the papers for mortgage pre-approval can be quite painless, granted the appropriate papers are prepared. But aside from paperwork, the pre-approval session with a lender should entail a discussion on the down payment and loan option.

It is also important to document the down payment. For Aiman Abozeid, Branch Manager at Inlanta Mortgage in Wisconsin, one should have a paper trail of where the down payment and closing cost funds come from. An individual cannot use any undocumented mattress money for down payment, gambling winnings, or deposited money from a credit card withdrawal. In case you will use odd deposits, you have to accompany them with deposit slips and an explanation to prove these are not unauthorized gifts.

For example, John is about to get married, and he will depend on cash gifts he will receive on his wedding for a down payment. On that note, lenders will require these cash gifts to be placed into his bank account the soonest time possible. They will also ask for a copy of his wedding invitation to make sure the deposit date is aligned with the wedding date.

In simplest terms, any change in finances, sudden or not, for better or worse, needs to be explained. If you cannot document such changes, it won’t matter. So if one of the family members have contributed to your pool of cash, make them sign gift letters, certifying these are not loans and do not oblige payment. Such letters have to be notarized, and doing it and getting back to the lender may take some time, slowing the loan process.