Applying for a mortgage is the most fun and exciting time in your life. No? Wait, sorry; buying a house is the most fun and exciting time in your life. Wait, no…it’s not. There is nothing about applying for a mortgage or buying a house that is fun except for the actually owning the house part and finally getting precisely what you want part. The rest is less fun than you’ll ever have. One of the biggest time killers in the home buying process is filling out your mortgage paperwork. It’s time-consuming, it’s boring, and it’s going to make you a little bit crazy.
Unfortunately, there really is not a thing I can do about that for you, but I can tell you that perhaps life would be a bit easier during this time if you learn to have no expectations and to enjoy wine. Otherwise, the best I can do is remind you that before you go into your bank to fill out that mortgage paperwork, you have everything with you that you need. Married to a banker – who does not issue loans or mortgages since he’s in a completely different department – and knowing many people who do issue mortgages, I know that one of the biggest complaints that they have is that their clients never have all the required paperwork to apply for a mortgage, and it lengthens the already lengthy process. It also makes them work harder, they cannot get anything done, and it makes their clients less than happy.
For that reason, you should always have all the required paperwork on hand when it comes to applying for that mortgage. I know what you need, and I’m happy to share with you the information that you are required to present so that you don’t have to make one hundred thousand trips to the bank while you feel your frustration rising. It’s irritating, and I’m all about not going there.
Everybody Needs These Documents
- Identification (Driver license, passport, ID)
- Secondary form of identification
- Credit report
- Two years’ work history information
- Employer information
- Verification of your home and payment
- Two previous period pay stubs
- Two months worth of bank statements
- Two years worth of tax returns
- Two years worth of W-2 forms
That’s a long, fun list, right? The bank just needs to know who you are and that you are actually able to make the payments on the mortgage that they are about to issue you. You’ll want to do yourself a huge favor and ensure your license and other identification are not expired, and you’re going to want to make sure you have those tax returns. If you don’t have them at home, you can call or visit the IRS online to request copies are sent to your home or even to the bank so that they are on file. The faster you take care of this, the faster you can speed up this process.
Self-Employed Persons Need All These Documents, Too
Now that you’re self-employed, you need even more. Not only do you need all of the above, you have to go above and beyond to bring with you more documentation than anyone else.
- 1099s for the past two years from all your clients
- Form 1120s or K1 form from your income tax return
- Your business and personal income tax returns for the past two years
- Proof of your self-employment
- Your current profit/loss statement and your balance sheet
The problem with these forms is that not all self-employed persons keep up with them all the time – though you should. Now is the time to start working on these to make sure they are the most current version so that you are not missing out on anything when it comes to applying for your mortgage and buying that dream home of yours.
Retired and Disabled Applicants Need Even More Paperwork
- Pension letter
- Social Security letter
- Permanent disability letter
- Retirement account statements – most recent
- Supplemental security income benefits letter
I’m sure I don’t have to tell you which ones you need based on whether or not you are retired or disabled or both.
Additionally, if you have a home already and you’ve sold it, you’re going to need to provide proof of the sale – including signed sales contracts and the appraisal of the home, as well as the contact information of your closing attorney for the bank.
To make you feel even more overwhelmed with all that you need to do at this point in time, your bank might request additional information from you, too. Some of the most commonly requested additional information includes your divorce statements, alimony decree, child support, student loan information, credit card information, car payments, utility bills, any bonuses you get at work, your retirement information, your business license and even your writer salary and position verification from your employer.
Sound like fun? It’s not, but good luck. The end result is so worth the frustration and time you put into it right now.
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