Earlier in chapter 3 of Buy, Close, Move in! we discussed 5 realities you face when applying for a loan. We covered what “good” credit really means and how condos are harder to finance than other homes. In today’s topic we dig deeper into reality #5: All information you provide will be verified. What does that mean? Lots of paper work.
Here is a document checklist for a loan application. Your lender should provide the exact list of documents needed but to ensure a smooth loan application it pays to get your documentation in order before you apply.
1. W-2 forms for each person on the loan. You will also want to provide contact information to the person within your company who can verify your income.
2. Copy of the fully executed sales contract. To include contact information of both the buyer and seller’s agent
3. Copy of one month’s worth of pay stubs. If you are self employed, you’ll need to show profit and loss statements for the current year.
4. Copy of the last 2 bank statements for every bank account, including retirement accounts. Lenders may require up to 6 months of history if you are using gift money for the down payment.
5. Copy of complete federal tax forms for the last 2 or 3 years. Primarily required of self employed individuals or those who are claiming rental income. State returns are not needed
6. If a gift is involved, such as funds from family members, the lender will need proof the gift giver has the funds and a gift letter affidavit indicating the funds are a gift and does not have to be repaid. Also needed is a copy of the check, the deposit receipt and a bank statement to verify the transaction.
7. List of your addresses in the last two years.
8. Proof of identity. Picture ID and a copy of your social security card
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