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What You’ll Need to Apply for a Home Loan

No matter where you apply for a home loan, the process always requires many similar documents and kinds of information from you, the borrower. Lenders may have their own unique forms and requirements in addition to the commonly asked-for information, of course. There are four specific items that are required nearly everywhere, and having these documents and information assembled before starting a loan application will make the process much smoother. Assemble this information into a packet ahead of time, and you’ll be ahead of the game! Here are a few tips on what to prepare:

Photo Identification

A valid government-issued photo ID is required of every person who will be signing the loan. A valid driver’s license is acceptable, but if you don’t have a driver’s license, a U.S. passport, Armed Forces Identification Card, or other combinations of ID are legal and accepted.

Bank Statements and Assets

Your previous bank statements help the lender in their evaluation of your loan application. The lender may ask for proof of other assets as well, such as insurance policies, investment balances, titles/deeds, or other proof of ownership and control. The number of previous bank statements and asset statements that the lender might ask for will vary, so be prepared to provide at least the previous 12 months of bank statements and investment balance statements. Lenders will look at how long funds have been available to you, and any recent large deposits will likely require an explanation of the origin of the funds. Ask your United Heritage Loan Specialist for more details if you anticipate family assistance such as parents gifting you the money for a down payment – this is not unusual, it simply needs explanation during your application.

Pay Stubs or W-2/1099s

Mortgage lenders require proof of employment and income as part of the loan process. W2s or 1099s for the previous two to three years are usually required of all borrowers. If you’re self-employed, the lender may ask for several months of statements or invoices as proof of steady employment and income.

Tax Returns

In order to get the most clear and fair picture of the borrower’s finances, a lender may ask for previous tax returns. This helps the lender evaluate your financial stability.They may request documentation for any large fluctuations over the preceding two to three years.

Credit History

When you apply for a home loan, your credit history, and that of your co-borrowers, are very important to the lender. Factors that can impact your application include your credit score, any late payments, or a pattern of accounts that have been in collections or defaulted. Also, your debt-to-income ratio is an important part of your overall financial picture. Applicants that have lower credit scores, problems in their credit history, or other issues can still qualify for a home loan; possibly at higher interest rates or modified loan terms. Ask your Loan Specialist if you have questions or concerns.