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One of the first steps to buying a home is getting pre-approved for a home loan. Here are the steps to take for this all-important part of the process.
1. Income Documentation
a. Employment Income
- Last 30 days of pay stubs
- W-2s from past two years
- Past two years’ tax returns with all schedules
- Year-to-date profit and loss statement (if self-employed)
- Past two years’ business tax returns (if self-employed)
- Written explanation of any employment gaps
- Employer contact information for verification
b. Additional Income
- Social Security award letters
- Pension distribution documentation
- Disability income verification
- Alimony/child support documentation
- Rental property income statements
- Investment income documentation
- Side business income proof
2. Asset Documentation
a. Bank Accounts
- Past two months of all bank statements
- All pages, even if blank
- Documentation of large deposits
- Source of down payment funds
- Gift letters if receiving assistance
- Proof of gift funds transfer
b. Investment Accounts
- Past two months of investment statements
- Retirement account statements
- Stock portfolio statements
- Mutual fund statements
- Documentation of liquidated investments
- 401(k) loan documentation if applicable
c. Property Assets
- Current real estate holdings documentation
- Rental property documentation
- Property tax statements
- Insurance declarations
- Mortgage statements for other properties
3. Debt Documentation
a. Current Obligations
- Mortgage statements
- Auto loan statements
- Student loan statements
- Credit card statements
- Personal loan documentation
- Business loan statements
- Child support/alimony obligations
b. Credit Documentation
- Credit report copies
- Written explanation of credit inquiries
- Documentation of paid collections
- Bankruptcy discharge papers if applicable
- Foreclosure documentation if applicable
- Short sale documentation if applicable
4. Personal Documentation
a. Identification
- Valid driver’s license
- Social Security card
- Passport if available
- Permanent resident card (if applicable)
- Work visa documentation (if applicable)
b. Status Documentation
- Divorce decree if applicable
- Separation agreement if applicable
- Child support orders
- Bankruptcy papers if filed in past 7 years
- Name change documentation
- Trust documentation if applicable
5. Property Information
a. Current Housing
- Current lease agreement
- Past 12 months’ rent payments proof
- Landlord contact information
- Current mortgage statement if applicable
- Property insurance declaration
- Property tax statement
b. Target Property (if identified)
- Purchase agreement
- Property tax information
- HOA documentation if applicable
- Insurance quotes
- Appraisal if completed
- Inspection reports if completed
6. Business Documentation (If Self-Employed)
a. Business Operation
- Business license
- Articles of incorporation
- Partnership agreements
- Past two years’ business tax returns
- Year-to-date profit and loss
- Current balance sheet
- Business bank statements (past 2 months)
b. Additional Business Items
- CPA contact information
- Business debt schedule
- Proof of business ownership percentage
- Corporate resolution if applicable
- Business lease agreements
- Equipment appraisals if applicable
7. Additional Requirements
a. Special Circumstances
- Bankruptcy discharge papers
- Foreclosure documentation
- Short sale documentation
- Deed in lieu documentation
- Collection account explanations
- Letter of explanation for credit issues
b. Program-Specific Items
- VA Certificate of Eligibility
- DD-214 for veterans
- FHA case number if applicable
- USDA eligibility documentation
- Down payment assistance approval
- First-time homebuyer education certificate
Note: This checklist represents common requirements. Specific lenders may require additional documentation or waive certain items based on their underwriting guidelines and your specific situation.
